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Notes for my contribution to memorial meeting on May 14, following Darce’s death on 2019-04-29

I’m not a historian and cannot do justice to the story of Darce Cassidy.

But I do know that he played a critically important part as a leader of the sixties rebellion in Australia and it would be well worthwhile for some historian to write up that story.

Most people who knew either Darce Cassidy or Jon Cassidy would know him as a progressive and radical who worked in the mainstream as an ABC journalist, staff organizer and manager and who was able to get on with all kinds of people helping others to organize themselves in a progressive direction that caused problems for the powers that be. He would be known by many for his contributions to Community and Multicultural radio and opposition to internet censorship and surveillance as director of the Electronic Frontiers Foundation. He did all of that and more, and it was central to his life.

But I knew him as a revolutionary as well as a friend, and specifically as a revolutionary communist leader, and I know that was also central to his life and should not be forgotten so I will focus on that. That description may come as a surprise to many who got to know him after the sixties wave had subsided when there was no radical left to help organize and lead. He was able to adapt because he always followed the “mass line” of taking progressive political ideas from the masses, concentrating and developing them and taking them back to the masses.

In the late 1960s Darce played a significant leadership role in the largest and best known radical student and youth organizations in Australia – the Maoist led Monash University Labour Club and Worker Student Alliance. Like other open supporters of the Vietnamese armed struggle against US occupation and advocates of militant protest tactics in Australia he was regularly slandered. Bob Santamaria’s far right wing Newsweekly had a major campaign to oust him from his “subversive” influence at the ABC, claiming that he was a terrorist. More common were the slanders from the “Communist” CPA, the “Labor” ALP “left” and some Trotskyists who portrayed revolutionary rebels like Darce as sectarians.

In response to Santamaria’s campaign, the ABC duly obtained a report on comrade Cassidy from ASIO. This confirmed that actually he was a revolutionary, not a terrorist, and that his employment in charge of book reviews for the ABC was not a matter of immediate concern to ASIO in the current situation and while he was not in charge of news or current affairs. But Darce was no sectarian either and helped ABC news and current affairs staff to rebel in ways that right-wingers are still upset about.

For anyone interested in sources to find out more about Darce’s revolutionary activities, in preparing notes I was helped by two references easily found online by a google search for “Monash Labor Club”. They are listed at the end.

ASIO’s records have been released and would provide a lot more detail.

Darce was not a theoretician, nor a public spokesperson for revolutionary politics. But he was a leader, with a major role in strategy, tactics and organization. His revolutionary work as a journalist and organiser was central to the radicalization of the youth and student movement in the sixties because he taught others how to do radical journalism, how to get organised and how to maneuver against our enemies without getting isolated. He was particularly good at teaching people how to think before writing, so as to produce short punchy items with real impact, through careful attention to catchy headlines and humorous slogans that adapted tactics to strategy.

Darce arrived in Melbourne and enrolled at Monash University shortly before things got moving in 1967. He immediately helped launch our regular news sheet called “Print”. Unlike most of the sixties activists in Australia he had several years experience of radical politics at Sydney University before the movement took off and had edited a weekly newsheet there called “Wednesday Commentary”. He advocated a neutral name to focus attention on the content not proclamation. But he originally proposed the name “Gladys” as he thought “Gladys says” would catch on. Fortunately we were able to persuade him that “I saw it in Print” would also work.

The sixties Vietnam movement in the US grew more directly out of the civil rights movement than in Australia (especially with black conscripts as the most important force). But a lot of the sixties Australian indigenous rights movement was also inspired by the US example. An obvious direct import was the rural NSW Freedom Ride that Darce helped organize in March 1965 following on from solidarity protests in support of the fights against racism in the U.S. and South Africa. The Vietnam movement also had a natural continuity from solidarity with US as well as South African struggles. (My own earliest political activity was as secretary of “Youth Against Apartheid” around the same time.)

It is ironic that we were presented as “anti-American”. As with the Freedom ride, even more so for Vietnam, a lot of the inspiration for the sixties movement came from following the examples set by radical Americans.

We did not have the internet back in the sixties. But we did have typewriters, wax stencils and duplicating machines called “Gestetners”. One of Darce’s slogans was “All power grows out of the barrel of a Gestetner”. Darce was more than anyone responsible for launching an irreverant and uncensorable underground journalism tradition of “the sixties” that Australian university and later high school authorities could not cope with.

Another of Darce’s slogans was “If there is to be a revolution there must be a revolutionary party – Friday night at Jasmine Street”.

Jasmine street was the home of several Monash Labor Club activists including Darce from the summer break1966-7.

The revolutionary parties at Jasmine Street every Friday were pretty wild, some would say they were drunken orgies. But the revolutionary music organized by Darce was not just background noise. Radical songs are always a necessary part of any radical culture and tradition. Jasmine Street was also the off campus HQ where people developed their ideas on HOW to rebel in continuous political discussion. Later a similar role was played by “Shirley Grove” and then “The Bakery” which became the headquarters of a non-student organization, the “Revolutionary Socialists”. Darce was central to organizing all three HQs, fostering an atmosphere in which ideas could develop. Later he proposed disbanding the Rev Socs to form a more explicitly Maoist led youth organization, WSA, the “Worker Student Alliance”, in January 1970.

These irreverant takeoffs from Mao’s slogans “All power grows out of the barrel of a gun” and “If there is to be a revolution, there must be a revolutionary party” were typical of the thoroughly irrevererant and politically incorrect sixties rebellion that Darce helped organize.

As Darce confirmed in an interview half a century later:

“By late 1966 early 1967 I grew to see ALP politics as futile and the Maoist stance offered a clear anti-Parliamentary line. Other than this fact it was the sheer rebelliousness of the Maoist ideas like ‘It is right to rebel’ that became attractive
to a lot us around that time.” (2005-09-03)

Soon after Darce’s arrival we had a major breakthrough in 1967. After some initial toughening up in response to attempts to censor “Print” from the University administration we were able to withstand a real “baptism by fire”. This came when we organized collections of aid for solidarity with the “National Liberation Front” who were fighting and defeating U.S. and Australian invaders in south Vietnam. The concentrated attacks from press, TV, government and University authorities as well as the peace movement “establishment” were a major turning point, not just for the student movement but for the wider anti-war movement. As intended the whole climate shifted left. The “moderates” were now able to distance themselves from us while also moving towards a position that the war could only be ended by defeat of the U.S. rather than by respectably influencing its government to be less aggressive. The left became a major force in the organized anti-war movement with Darce often representing us at private meetings where he helped out maneuver the old guard “peace movement” without them ever quite understanding how they got done over.

Darce’s detailed organizational proposal for moving from a weekly “Print” to a daily were written under the name Len Esdaile in the third issue of the internal bulletin of the Young Communist League, Sunday February 15 1969. Eventually the Monash radical student movement had many weeklies, including those from groups in most Faculties such as “Spanner and Sickle” in Engineering, as well as the daily “Print”. Many high schools also had their own regular newsheets based on the same rebellious and offensive “underground” style. These had to be distributed anonymously as the editors would be expelled from school. Being cheeky, rebellious and highly offensive to all right thinking people was easy. Learning to do it skillfully required lessons from a professional revolutionary journalist – Darce Cassidy, also known as “Tony Brooks”.

Darce’s commitment, like that of other sixties radicals, was not virtue signalling and hence was of interest to ASIO without them pretending that he was a eiither a terrorist or about to launch an armed struggle. Like the rest of us he was totally in favour of offending people to make them think (while rejecting the “being offended” that helps people avoid thinking). He was of course hostile to the censorious “political correctness” that now dominates the pseudo-left that imploded into the vacuum left by the subsiding radical wave half a century ago. It was the radical left, not the right that invented that term “politically incorrect”, and its Australian equivalent “ideologically unsound” to mock the pretensions of the pseudoleft.

Darce was a thorougly mainstream and thoroughly political incorrect revolutionary. That style of politics was fun. Darce will be remembered for it.

Do above first for quick preview without spoilers. Numerous surveys done with this quiz. Consistently show that most people including most “experts” do worse on choosing between 3 plausible answers to basic factual questions about the world than random one out of three guesses of “Chimpanzees”.

Next May will be the half-centennial of the defining month of the “sixties”.

Marx and Engels were “forty-eighters”. A much more significant generation/cohort that took part in the defeated European revolutions of 1848. Two decades later some 200,000 German forty-eighters fought in the second American revolution, making up about 10% of Lincoln’s armed forces, with greater success. The sixty-eighters had no such defeats and no such successes. But we did do something. Half a century is far too long between rounds. But I don’t think it will be as long again before, once more,

the times, they are a-changin’

Last year, 2017, was part of a rather dreary few decades with the left moribund. But it had several anniversaries that deserve many books each. Not just to commemorate the past but for their lessons for the future, and hopefully the immediate future.

It was 150 years since publication of Karl Marx’s Capital Volume 1 in a first edition of 1000 copies (September 14, 1867). That was two decades after the “Communist Manifesto” of the “forty-eighters”. Itself following “scarce two hundred years” of bourgeois rule since the English revolution.

Two centuries earlier, in 1817, Europe was just emerging from the Napoleonic wars. The French and American revolutions were recent and what is now the modern world was not yet fully visible. Most of the world – Asia, Africa and Latin America had not emerged into modern history.

November was the centennial of the “October Revolution” (November 7, 1917).

It was 60 years since the Sputnik was launched (October 4, 1957).

That was a decade before the half-centennial of “Red October”.

I remember celebrating that half-centennial in 1967 with half a bottle of vodka, despite the Red Flag having already gone down by the time the Sputnik went up. I got literally blind drunk (on the floor and unable to see). I did not make that mistake again in November, indeed it put me off alcohol for life.

It is also about half a century since Mao launched the Chinese Cultural Revolution and about 40 years since his death and defeat of the Chinese revolution. It has been a very long temporary setback!

It is difficult to claim that communism is still “the mind, the heart, the conscience of our era”.

The social-fascists and lemmingist sects seem to have long ago completely obliterated Leninism, Maoism and communism.

As Marx said:

“ce qu’il y a de certain c’est que moi, je ne suis pas Marxiste” (“what is certain is that I myself am not a Marxist”). [5]

Indeed the very concept of a “left” in its broadest sense seems to have been displaced by the pseudoleft so that the generally accepted meaning of “left”, as understood by both supporters and opponents, is more or less identical with “reactionary”. That is the tendency fundamentally hostile to modernity and progress that “stands athwart history, yelling Stop”. This allows the conservative right to parade as rebels.

All the more reason to raise the Red flag and the banner of Red October and Lenin!

Do the traditions of “Leninist vanguard parties” have much relevance today? No, and they never did. Lenin thought the Comintern resolutions on organization were “too Russian”. The Bolshevik party was a mass party based on the organizational principles of the German workers party that led the second international before its collapse, as necessarily adapted to cope with the Tsarist secret police. There never was a mass revolutionary workers party in the West.

Does Lenin’s work “Imperialism: the highest stage of capitalism” have much relevance today? No, there have certainly turned out to be a few more higher rungs on the ladder since that was written. Lenin’s claim that the period of the first world war was the final rung before victory of proletarian revolution, looked plausible enough then, but it makes no sense a century later! It was only a pamphlet dealing with the specific circumstances leading up to that imperialist world war, published under Tsarist censorhip. Lenin was right about the times he lived in but wrong about the future. He certainly cannot be blamed for the “anti-imperialist” pseudoleft whose “anti-globalist”, “anti-capitalist” and “anti-elite” politics and solidarity with putrid third world kleptocrat regimes has recently been “Trumped”.

According to Stalin:

“Developing capitalism,” says Lenin, “knows two historical tendencies in the national question. First: the awakening of national life and national movements, struggle against all national oppression, creation of national states. Second: development and acceleration of all kinds of intercourse between nations, breakdown of national barriers, creation of the international unity of capital, of economic life in general, of politics, science, etc.

“Both tendencies are a world-wide law of capitalism. The first predominates at the beginning of its development, the second characterises mature capitalism that is moving towards its transformation into socialist society” (see Vol. XVII, pp. 139-40).

For imperialism these two tendencies represent irreconcilable contradictions; because imperialism cannot exist without exploiting colonies and forcibly retaining them within the framework of the “integral whole”; because imperialism can bring nations together only by means of annexations and colonial conquest, without which imperialism is, generally speaking, inconceivable.

For communism, on the contrary, these tendencies are but two sides of a single cause-the cause of the emancipation of the oppressed people from the yoke of imperialism; because communism knows that the union of peoples in a single world economic system is possible only in the basis of mutual confidence and voluntary agreement, and that road to the formation of a voluntary union of peoples lies through the separation of the colonies from the “integral” imperialist “whole,” through the transformation of the colonies into independent states.

Thanks in large part to the movement led by Lenin and Stalin, the second tendency has largely prevailed and annexations and colonial conquest have become, generally speaking, inconceivable. If another world war did break out it would certainly be ended by world revolution. That makes it rather unlikely for any imperialist power to try their luck.

Were the Mensheviks right that Russia was too backward for the workers to hold power? Yes, and so it turns out were the more advanced countries of the West. But Lenin was right that 50,000 bolsheviks could do a better job of modernizing Russia than 5,000 Tsarist landlords. They did their duty.

They not only fought, but fought well. Under the leadership of Lenin and then Stalin they defeated both feudalism and fascism and dragged not only Russia but the whole of Eastern Europe into modernity (kicking and screaming). Russia went from the sick man of Europe to a superpower. Even after internal defeat the momentum still resulted in the Sputnik which forced the imperialist bourgeoise to join in unleashing science and technology in a way that has transformed the world to the despair of reactionaries. The revolution spread to Asia, Africa and Latin America. The Chinese revolution led by Mao inspired the defeat of US imperialism in Vietnam and its retreat worldwide. The Chinese Cultural Revolution and the revolts in Eastern Europe merged with the sixties in the West.

The “years of stagnation” under social-facism leading to the collapse of the Soviet Union, with subsequent oligarchical rule, the absurd plutocracy in China, even more ridiculous hereditary monarchy in North Korea and deeply corrupt crony capitalism in Vietnam have been successfully used to discredit those historic victories. But they actually illustrate how huge an achievement those Leninist revolutions were, given the backwardness of those societies.

The English, French and American revolutions were not discredited by British, French and American imperialism. No revolution ends history. There is always a need for another revolution.

Was Rosa Luxemburg right that the party dictatorship in Russia would demobilize the workers and end up a dictatorship against them? Yes, but Lenin was right that the only alternative to Bolshevik dictatorship at the time was not bourgeois democracy, or even the oligarchic kleptocracy that rules today, but semi-feudal Whiteguard reaction. (Even Putin is a vast improvement compared with both Brezhnev and the Tsarist generals that would have replaced Kerensky if the Leninists had not).

Did Leninism lead to Stalinism and Maoism and end up with Brezhnev and Teng Hsiao-ping? Yes, and of course the social democrats are quite correct in pointing out that there is continuity between Lenin and Stalin and Mao. They were indeed on the same side and as the anarchists point out there was also continuity with Marx and Engels who were likewise on the same side. But it was the opposite side to the regimes that have held power in Russia and China for many decades.

Are we still living in the “era of imperialism and proletarian revolution”?

I’m really not sure. That era was only coming into being with the first world war and it has been passing away since the second world war. If we are still in the same era, we certainly lack a good theoretical summary of the phase of that era which we are now in. If we are in a different era there are certainly a lot of historical tasks still uncompleted, including democratic revolution in much of the world and proletarian revolution in all of it and we have not developed any clear idea of where we are or where we are going or even a minimal sketch of the nature of our era.

In working out the theory and tasks of our age we have a great heritage from Marx, Engels, Lenin, Stalin and Mao with much to learn from both their sucesses and failures but a very long way to go.

The half century from the “forty-eighters” to the Bolsheviks meant that communists could not just defend and apply the theories of Marx and Engels but had to develop them further to “Marxism-Leninism” as was done under the leadership of Lenin. Lenin died in early 1924, less than 7 years after the revolution he led. His legacy of “Leninism” was most authoritatively described by Stalin in “Foundations of Leninism” very shortly after Lenin’s death. That work is well worth close study today.

I think the central concepts of Leninism are expressed in this quotation:

“The dictatorship of the proletariat,” says Lenin, “is a stubborn struggle-bloody and bloodless, violent and peaceful, military and economic, educational and administrative-against the forces and traditions of the old society. The force of habit of millions and tens of millions is a most terrible force. Without an iron party tempered in the struggle, without a party enjoying the confidence of all that is honest in the given class without a party capable of watching and influencing the mood of the masses, it is impossible to conduct such a strategy successfully”

The world has changed a lot since then. But I cannot imagine a a transition from capitalism with bourgeois rule via anything other than a protracted stubborn struggle for working class rule, as described. Nor can I imagine success in that struggle without a party as described.

Plainly these conditions do not currently exist. “Party building is bullshit!” was the correct, Leninist, response to lemmingists pretending that such conditions existed four decades ago. A different response will be necessary when the times are again a-changing’.

Meanwhile the other main lesson I would draw from Leninism is the central importance of “theory”, as mentioned in Chapter 3 of Stalin’s “Foundations”.

“Without a revolutionary theory there can be no revolutionary movement.”

Stalin led the Soviet Union, and the world revolution, for some three decades, including victory in the war against fascism. But even a casual reading of “Foundations of Leninism” shows he got a lot wrong. The dangers to the revolution that he described were successfully defeated as Stalin said they would be. But the main danger was, as always, the one not prepared against – the “unknown unknowns”. We now know the enemy was right inside the party, with a social base in the “forces and traditions of the old society” that was indeed a “most terrible force”.

Mao took the struggle much further, and in a far more backward society. He correctly analysed many of Stalin’s errors, again developing Marxism-Leninism to a new and higher stage.

That too was defeated and the decades of collapse have been a lot longer than I ever expected. Capitalism did remarkably well in continuing to develop the productive forces.

I think we may be heading into another period of turbulent upheaval soon. It would be astonishing if no revolutionary theory suited to the times emerges in such conditions. When it does, it cannot resuscitate the theories of Marx, Engels, Lenin, Stalin or Mao but it will develop them further based on lessons learned.

Historian Stephen Velychenko penned this ‘open letter’ to US film-maker Oliver Stone on 1 January 2015. It is reprinted with permission of Krytyka, the ‘Thinking Ukraine’ website. Among other things, the letter points out that foreign involvement in regime change and revolution is nothing new and that includes the American people’s own revolution against tyranny and the Vietnamese national liberation struggle during the 1950s to the 1970s.

‘Things can turn into their opposite’ and we see this today with the various ‘anti-imperialists’ who long ago stood on the side of the people but who are now siding with the far-Right Russian chauvinist Putin’s slanders against Ukraine’s democratic struggle.

I am an academic historian who likes to think he has some knowledge of world events during the past centuries. I am someone who has watched and thought about some of your better films and who had the good fortune to have been in Kyiv on the Maidan in November-December 2013.

I was appalled and distressed when I read that a person of your stature had decided he would make a film about Ukraine’s ousted dictator Victor Ianukovich. What unsettled me was not your idea about interviewing a dictator on film. Documentaries about surviving ousted dictators are important and useful. What I found appalling was not only that you seem to share his interpretation of his fate, but that you seem to attach particular significance to that interpretation. You seem actually to believe Mr. Ianukovich who, understandably, like any overthrown dictator, attributes his fate to “outside forces” rather than to himself, his policies and supporters, domestic and foreign. Just like Mr. Ianukovich and Mr. Putin, you seem to think that the new government that emerged from the Maidan events 2013-14 is the product of CIA machinations, that CIA involvement was something exceptionally noteworthy, and, implicitly, that because this government is supposedly a CIA product, it has no merit or credibility.

Do you really believe Mr. Stone that in any of the great events in world history during the past centuries the intelligence services and spies of the great powers of the time were not involved? Simply noting this fact in isolation from all other events leads either to apologetics or conspiracy theories. Allow me to illustrate my point.

In so far as French secret agents were involved with the leaders of the American rebellion of 1776, some of whom were Masons, does that fact override the influence of enlightenment ideals and the interests and grievances of those who fought King George’s army? Did the presence of French spies and Masons in Philadelphia New York and Boston mean George Washington was part of a foreign plot? Does the British government’s support for Greek nationalists in the 1820s mean their anti-Turkish revolt was merely a British plot? In so far as Spanish, French and German agents supported Irish leaders in their wars against the English government, does that mean that those who fought British troops in the name of Irish independence were dupes in foreign plots? Was the 1916 Easter Rising really a failed German plot? In so far as German intelligence supported and financed the Bolsheviks in 1917-1918, does that mean the Russian revolution was simply a German plot and that those opposed to the tsar had no legitimate interests or grievances? Did covert Russian and Chinese support for Vietnam mean a sizeable proportion of the Vietnamese people had no legitimate grievances against French or American rule and that their decades long war against those governments was merely a KGB plot?

I put it to you Mr. Stone that anyone who produces a film focusing only on the participation of one particular secret service in a given event merely creates cheap propaganda – in this instance of the kind that will benefit Mr. Putin and his dictatorship. At this point, I should perhaps add that, like many others, I have a critical view of the US government and US corporations. I am well aware of the work of analysts like Chalmers Johnson, Richard Barnet, William Greider, Naomi Klein, Gregg Palast, Will Hutton, Michael Hudson, Thomas Frank and Arianna Huffington. But I am among those who do not allow their critical view of the US and corporate power to blind them to the reality of Stalinist or Putinist Russia.

In so far as I am familiar with your films they do not suggest any knowledge of or previous work on eastern Europe or Russia, let alone Ukraine on your part. This is not surprising as for many Americans, even today, Ukraine still remains a “part of Russia”, a place “far away of which we know little.” But once one decides to undertake a project related to that part of the world such intellectual indifference is no longer acceptable. Allow me therefore take the liberty to suggest that you not limit any research you might undertake to Mr. Ianukovich, his cronies and Russian advisors. Might I suggest you at least peruse Karen Dawisha’s recent book Putin’s Kleptocracy (2013) and some of Andrew Wilson’s and Timothy Snyder’s books on Ukraine.

I hope that, at this early stage, your first thoughts about your possible film on Ianukovich and his rule have been misinterpreted or misunderstood and that my remarks prove unnecessary and irrelevant. But, in as much as you do seem interested at this point in a documentary film about one of the great events of post war Europe, I hope that you will record not only the activities of the CIA in that event. I trust you will also record the role of Putin’s FSB in bringing Ianukovich to power in 2010, in controlling his government thereafter, and in the events of 2013-14. Since Mr. Putin’s government has obviously given you a visa and permission to visit Mr. Ianukovich in Russia, dare one imagine your hosts might also oblige you with access to FSB files about FSB activities?

In any case, I trust that any film you might make on Ukraine will pay due attention to the interests and grievances of Ukrainians, who, like their eastern European counterparts demonstrated in 1989, do not want to be ruled by pro-Kremlin elites and are now again, as in 1917-22, fighting a Russian invasion to prove it. I would also hope that if a director of your repute did make a documentary film about Ukraine it would not simply parrot the ideas of a reviled ousted dictator who built fortified fairy-land palaces with gold toilets in a country foul with corruption private wealth and public squalor. I would hope such a film explain that Ukrainians want no more to be controlled by Russia or Russian controlled dictators, than Latin American and Asian peoples want to be controlled by America or American controlled dictators.

The following analysis of Syria, from a left-wing perspective of support for the anti-fascist democratic revolution there, is republished with permission from the site Democratic Revolution, Syria style. “The revolution is the negation of the regime and Daesh is the negation of the revolution”. It was published there on 1 August 2014.

* * * *

The Leviathan built by Hafez al-Assad, a fascist state stretching from Daraa in the west of Syria to Deir Ezzor in the east, has been shattered irrevocably by thepopular upsurge of the March 15 revolution. Born as a peaceful protest movement for dignity and political reform, the Syrian uprising painfully and organically developed into a revolutionary war to liberate the country from the misrule of Bashar al-Assad’s fascist clique and dismantle his regime’s barbaric institutions.

Like all wars, this war in the final analysis is a class war. Suburban and rural (mostly Sunni) farmers, laborers, small merchants, and elements of big business fight to overthrow their enemies, the urban-based Alawite-dominated state apparatus, that apparat‘s junior partners — the Alawite, Sunni, and Christian bourgeoisies — as well as its Iranian, Iraqi, and Hezbollah enablers. Unfortunately, these enemies do not fight alone: educated professional urban Sunnis constitute the backbone of the civil service bureaucracy that keeps the regime running and some 15%-20% of the adult male Alawite population serve in the military-security services. Those who have nothing to lose find themselves in combat fighting those who have nothing to lose but their chains. The have-nots fight for freedom while the have-littles fight for fascism.

________________________________________“Who do you feel best represents the interests and aspirations of the Syrian people?”

The anti-fascist democratic revolution that emerged out of the contradictions of Syria’s sect-class system has spawned a sect-class war that spread far from the city of Daraa where the uprising first gained traction to Lebanon, Iraq, Turkey, and Kurdistan. The peoples of the whole region are now paying the price for:
1. The sins of Assad and his supporters.
2. The revolution’s inability to defeat and remove them from power.
3. The terrorist-creating policies of the U.S.-led so-called ‘Friends of Syria‘ who shamefully allowed themselves to be out-spent, out-gunned, out-maneuvered, and out-committed by Iran at every turn for more than three years because they prefer military stalemate as a means of engineering a negotiated settlement over an outright rebel victory.

These three factors have protracted Syria’s war of liberation and led to what Marx termed “the common ruin of the contending classes” – $144 billion in economic losses in a country whose 2011 GDP was $64 billion, 50% unemployment (90% in rebel-held areas), 50% in dire poverty, rampant inflation, polio outbreaks among children, and 9 million (almost half the population) displaced with 3 million living in camps abroad.

And there is no end in sight to this unfolding disaster.

The increasingly protracted nature of Syria’s anti-fascist war has transformed groundless optimism among the revolution’s supporters into its opposite: cynicism. Conversely, Assad is confident that his regime is no longer in danger of being overthrown. Both trends in both camps stem from the regime’s string of strategic military victories — in summer of 2013 at Qusayr, in fall of 2013 at Safira, in March 2014 at Yabroud, and in April 2014 at Qalamoun. However, military momentum alone cannot reveal who the victor and vanquished will ultimately be. Only by analyzing the strong and weak points that characterize each side and how those points have changed during the course of the war can reveal who can win and how.

Regime Weak Points:
o Unjust cause.
o Popular support based on opportunism (‘who will win? who will pay me?’), not conviction.
o Manpower.
o Fighters motivated more by fear, circumstance, and money than ideology or conviction.
o Parasitic dependence on foreign allies.
o Oil-producing and agricultural areas, the principal sources of hard currency and economic viability of the pre-2011 regime, no longer under regime control.
o Gulf state investment and tourism that fueled the Bashar-era economic boom gone for the foreseeable future.

Rebel Strong Points:
o Just cause.
o Fighters motivated by conviction and religious fervor (‘God is on my side‘) rather than opportunism.
o Manpower.
o Popular support based on conviction, not opportunism.

The old regime fought to crush the uprising and disintegrated amid defections of its troops and officials throughout 2011 and 2012 thereby creating a ‘new’ regime. Regime 2.0 is a leaner, meaner, defection-free killing machine whose war-fighting is characterized by strategic vision, methodical prioritization, and a disciplined command structure steady enough to guide campaigns over weeks and months to victory. Whereas regime 1.0 fought to obliterate the uprising in all areas at once, regime 2.0 picks and chooses its offensives and seeks to buy ever-more time to gain ever-more advantages over the rebels. Its military strategy is to hold onto the cities, highways, and airbases — even at the cost of leaving the suburbs and the countryside to the rebels — while organizing a series of strategic offensives to clear the core of the country (stretching from Daraa to Aleppo) of rebel fighters, forcing them to the periphery and reducing their status from major threat to manageable nuisance. Its political strategy is to prevent opposition forces from gaining popularity. This is accomplished through two mechanisms: make the price of defying the regime so high that no city or large town will dare join the revolution of its own volition and make governance (let alone good governance) in liberated areas impossible. The emergence of free Syrian territories where the hungry are fed, the sick are cared for, and where law and order prevail without a massive apparatus of torture and terror would threaten the reluctant, grudging support people give the regime as a lesser or necessary evil. This two-fold political strategy is why the regime relentlessly attacks targets of no military value like hospitals, bakeries, and schools while airstrikes on the Islamic State (formerly ISIS/ISL, known pejoratively as Daesh) have been rare (see below) up until recently.

The post-revolution Assad regime is significantly weaker than its 2011 precursor despite its seeming immunity to defections and lower threshold for victory. Its chemical weapons arsenal is gone. Less than 50% of the country is under its control. Most importantly, having permanently lost control over the wheat, cotton, and oil-producing rural north and east, the regime is no longer economically viable. Regime 2.0 is a militarily robust failed state in the making. Wheat production has fallen dramatically, centralized state purchase of grain from farmers has given way to localized transactions, inflation is spiraling out of control, industry has ground to a halt, children begging on the streets of the capital Damascus is now commonplace, oil production (one of the few sources of hard currency for the regime) has all but ended, Syria has become a net oil importer even as its oil consumption has fallen, and widespread food shortages afflict rich and poor alike.

________________________________________

“Which of the following have you had a shortage of in the last six months?”
Monthly
Household
Income Electricity Food Water
Less than 15,000 SYP 74% 56% 40%
15,000-25,000 SYP 76% 49% 44%
25,001-45,000 SYP 74% 51% 42%
More than 45,000 SYP 78% 47% 43%
Source: Orb International.
________________________________________

The post-revolution regime is not only living on borrowed time but borrowed money — mainly Iran’s. However, it is unlikely that Damascus will ever repay even a fraction of the over $10 billion and counting Tehran spent saving Syrian national socialism from reaching a tipping point of no return during the armed rebellion’s peak in late 2012 and early 2013. Iran’s rulers will learn the hard way what France, Britain, and the U.S. discovered in the 20th century: that colonies and protectorates are expensive and prohibitively so from the standpoint of return on investment.
One new feature of the post-revolution regime is that Assad no longer wields absolute power. He answers to not only Iran and Hezbollah but to his generals (who now enjoy some command autonomy unlike before the revolution) as well as to the newly created Iranian/Hezbollah-trained National Defense Forces (NDF). Assad’s diminished authority became evident during Geneva 2 in two respects: first, Russia compelled the regime to attend talks it spent years rejecting in under 24 hours and second, the NDF continued shelling Homs despite the deal Assad made with the United Nations (UN) to evacuate civilians from besieged neighborhoods. During the evacuation conducted under UN supervision, Homs governor Talal al Barazi screamed at NDF members for abusing and interrogating evacuees in plain sight: “What’s wrong with you? This is the United Nations. We have been getting calls from Geneva!” Similarly, when the 2,000 heroes of Homs were evacuated in May 2014, UN personnel were placed on each vehicle filled with rebels to prevent the NDF from shelling their exit and sabotaging the deal which included a prisoner exchange.

So while Assad’s reliance on a few but firm allies is a source of strength against the rebels whose allies are many but mealy-mouthed, it has also become a weakness since his regime has grown parasitically and permanently dependent on their financial, military, and political life support. Russia exercised its growing leverage over the embattled regime by forcing Assad to surrender the bulk of his prized chemical weapons stockpile in order to avoid airstrikes, the threat of which not only halted the regime’s barrel bombing but also triggered a spike in defections. A U.S.-led air campaign would have tipped the battlefield balance towards the rebels for as long as it lasted and both Russia and Iran were determined to avoid the possibility of the regime’s irrevocable disintegration and defeat. The price of the regime’s survival was Assad’s sarin supply and his foreign overlords were happy to pay it.

Thus, Assad has fallen from his 2011 position as Führer to that of a governor of an Iranian semi-protectorate rife with quasi-independent militias that often victimize regime supporters. Just as the Assad family uses their Alawite co-religionists as human shields for their rule, Iran uses Syria for its operations against Israel. In a historic shift from Hafez’s policy of keeping his side of the Golan Heights quiet, Bashar and Hezbollah recently launched token attacks on Israel from the Golan, triggering Israeli retaliation. In this way, Iran opened a second (insignificant) front against Israel during Israel’s 2014 attack on another recipient of Iran’s aid, Hamas, and demonstrated that Syrian independence is increasingly a thing of the past.

A Second Revolution or War of Mutual Exhaustion?

Can the post-revolution Assad regime be overthrown? Could a second revolution break out behind regime lines and finish what Daraa started? Such an uprising is an objective possibility given the simmering, casualty-driven discontent among Alawites but highly unlikely because it would have to take the form of an armed uprising from the outset since a peaceful uprising against a fascist regime at war is impossible. As long as the war — which suppresses dissension among the regime’s remaining supporters — continues with virtually unlimited foreign economic, political, and military support from abroad, the regime can avoid another revolution, that is, “the violent break-up of [an] obsolete political superstructure, the contradiction between which and the new relations of production caused its collapse at a certain moment” (Lenin) that often follows when a political superstructure’s economic basis has ceased to exist.

Without a second revolution to topple the post-2011 regime, Syria’s revolutionary war of liberation has become a protracted struggle of attrition, a contest of mutual exhaustion and mutual annihilation. The strategic equilibrium or stalemate between regime and rebel forces will persist until one side either organizes a series of decisive offensives to gain total victory or collapses out of exhaustion brought about by its own internal contradictions.

The fact that a second revolution or war of quick decision to defeat the regime is not an immediate prospect is not necessarily grounds for despair. The regime enjoys material superiority over the revolution but not moral superiority. The unjust and reactionary nature of the regime and its war aims gives rise to its critical weakness: its manpower shortage. Not enough Syrians are willing to die for fascism; those that are willing tend to either be morally rotten criminals eager to get a salary for raping, looting, and torturing their countrymen or conscriptswho fear imprisonment and torture for draft-dodging. These criminal and cowardly elements have difficulty sustaining close combat with rebels who fight not for personal gain but out of conviction that their cause is just and that God is on their side. So few Syrians are motivated to charge into battle and lay down their lives for tyranny and oppression that some 10,000 Iranian, Hezbollah, and Iraqi sectarian Shia militiamen were imported to serve as the regime’s shock troops. Once sectarian killing spread to Iraq, Iraqi Shia militiamen returned home to kill Sunnis, creating a manpower shortage for Hezbollah whose idea of ‘resisting‘ Israel is slaughtering Syrians and starving Palestinians on Assad’s behalf.

The moral bankruptcy of the regime finds expression in its war-fighting methods: heavy on firepower, light on manpower (save for strategically critical offensives to regain lost ground). Because the regime cannot afford to lose manpower in head-to-head combat with rebel forces, it demolishes neighborhoods, resorts to barrel bomb terrorism, starves women and children, uses Scud missiles and sarin, and signs starvation truces and evacuation deals with rebel neighborhoods instead of invading them and ousting the fighters. Free Aleppo was forcibly de-populated using these methods with the aim of destroying rebel manpower by depriving them of their popular base of support. Without the people standing firmly behind and among them, isolated rebels can be defeated with superior firepower.
Unity: A Do-or-Die Task for the Revolution

To fight — much less win — a war with these characteristics, the key strategic imperative for the rebels is not to seize and hold territory (as in conventional war) but to annihilate enemy manpower (as in guerrilla war). Territory changes hands day to day, month to month with every skirmish and battle, but available manpower ultimately determines who is capable of controlling what.

However, to take advantage of the regime’s key weakness (manpower) and turn the tide of the war once more in their favor, the rebels must overcome their key weakness — lack of unity (and related to this, poor leadership).

Rebel disunity has been the single most powerful weapon in Assad’s arsenal. Time and again, this disunity has allowed the regime to capitalize on its strong points and minimize its weak points while simultaneously neutralizing rebel strong points and magnifying rebel weak points. Consider the rebel response to each regime offensive since June 2013:

o At Qusayr, some reinforcements came from as far as Aleppo to fight the offensive head-on. The regime’s superior firepower and massed manpower overwhelmed the city’s defenders. Shock swept opposition circles even though the battle, as a head-on clash between a stronger and a weaker force, could not have ended in anything other than a regime victory. A counter-offensive elsewhere to relieve pressure from Qusayr or weaken the regime’s attack was never an option because rebels were too divided.

o At Safira, there was no rebel effort to resist or counter the regime’s advance. It fell without a fight, giving the regime a beach head to push rebel forces out of Aleppo. Colonel Abdul-Jabbar al-Aqidi resigned from his position on the Free Syrian Army’s (FSA) Supreme Military Council to protest the rebels’ failure to lift a finger to defend the city.

o At Yabroud and Qalamoun, rebel forces massed to resist the regime’s offensive. Knowing that head-on, open-ended resistance would end in defeat and the total destruction of their forces, they followed Mao Tse-Tung’s principles for guerrilla operations: “The enemy advances, we retreat; the enemy camps, we harass; the enemy tires, we attack; the enemy retreats, we pursue.” They avoided annihilation in decisive engagements but continually fought as they fell back in orderly fashion from the regime’s months-long advances, preserving themselves for future guerrilla operations in Qalamoun once the regime declared ‘victory’ and re-deployed its forces elsewhere. However, Jabhat al-Nusra refused to follow the rebels’ plan of action, executing rebels who (correctly) retreated and accusing their brigades of taking bribes from foreign powers in exchange for losing the battle on purpose.

Daesh’s ‘liberation‘ of al-Raqqa from its liberators in 2013 was due principally not to collusion with the regime but to this same rebel disunity. Each faction and brigade was confronted and eliminated one by one by Baghdadi’s gangs who then applied this strategic template all over northern Syria in 2013, opportunistically isolating and picking off rival groups, commanders, and towns even as they collaborated with these same groups in anti-regime operations such as the seizure of Menagh airbase. They took advantage of the frictions between the secular-democratic FSA and the Islamist-democratic factions by relentlessly targeting the former while avoiding or collaborating with the latter. This fed Islamists’ illusions that Daesh were merely misguided Muslim brothers and fellow mujahideen rather than bearded Bashars and Kharijites.

The revolution within the revolution in January 2014 to overthrow Daesh in northern Syria was similarly stunted by rebel disunity. Factions that later coalesced as the Syrian Revolutionary Front led by Jamal Marouf and the Army of Mujahideen sprang into battle while the constituent elements of the Islamic Front were incoherent, some fighting, others avoiding combat. Ahrar al-Sham, whose commanders’ mutilations by Daesh provoked denunciation by the first Friday protest of 2014, initially held its fire. Its leader Hassan Abboud, who also heads the Islamic Front’s political office, offered to mediate with Daesh even as popular fury exploded against them in demonstrations and armed attacks. Only after the Daesh launched wave after wave of suicide attacks against Islamic Front’s Liwa al-Tawhid while rejecting mediation offers for weeks did the Islamic Front as a whole begin to fight them. This divided response undermined rebels’ momentum and allowed Daesh to retreat under fire from much of Aleppo province and bloodlessly evacuate Idlib and regroup in al-Raqqa and in eastern Syria/western Iraq. Failing to finish Daesh off gave them time to lick their wounds and prepare for a ferocious wave of victorious offensives in Deir Ezzor, western Iraq, and Kurdish areas of Syria that culminated in the declaration of a Caliphate in summer of 2014.

Overcoming disunity is the most important task facing rebel (and political opposition) forces. Without uniting those who can be united, it is impossible to pursue a common policy, impossible to respond coherently either to the regime or Daesh, impossible to forge effective leadership, and therefore all but impossible to win the war.

Only great unity can lead to great victory.

Rebel cooperation remains largely local and occasionally regional rather than national. After three years, rebels still have not established a unified command or even set up a national operations room. Doing so is essential for rebels to move beyond winning short-term tactical victories like the Kessab offensive in early 2014 to long-term strategic victories, the accumulation of which will destroy the regime. The regime’s national scope and operation along interior lines allow it to neutralize and eventually reverse locally and regionally limited rebel forces operating along exterior lines by quickly redeploying its forces and assets from one front to another. The only way rebel forces can counter this (since they fight along exterior lines) is through greater coordination, so when the regime makes a concerted effort to gain ground in Aleppo, rebels counter-attack in Latakia (for example). Until cross-front and cross-regional coordination develops, rebel tactical victories will continue to be nullified by the regime’s ability to win strategic victories and only by accumulating strategic victories can rebels regain the initiative in the war.

Amalgamating rebel forces — some 150,000 men divided among a handful of big coalitions and countless smaller formations — into a single army with a clearchain of command is probably impossible. Nonetheless, a national operations room to assemble an operationally albeit not ideologically cohesive coalition of coalitions could work if rebel commanders are willing to surrender some autonomy for the sake of greater coherence as a national fighting force. However, the experience of the Islamic Front shows how difficult uniting is in practice even with good faith commitment by constituent groups. As with any politically heterogeneous opposition formation, the moment the front takes a position or an action that is controversial, it leads to fitna which, more often than not, causes counterproductive splits. Army of Islam commander Zahran Alloush’s decision to suspend his army’s participation in the Islamic Front in response to the Islamic Front’s Revolutionary Covenant is but one example of this tendency.

Rebel unity is more urgent than ever given the second great schism among forces fighting the regime: the war Al-Qaeda affiliate Jabhat al-Nusra launched in July 2014 to smash the FSA and carve out territorially contiguous theocratic emirates in Idlib and Daraa. Jabhat al-Nusra’s aggression was precipitated by ever-greater U.S. involvement on the side of the opposition and Daesh’s newly declared Caliphate, both of which threatened the Al-Qaeda project in Syria from different directions.

The Balance of Forces: Shifts and Underlying Trends

The single most important thing to understand about Syria today is that the pre-2011 political setup is gone forever. No force on Earth can reverse that. The battle now is over what will replace the old arrangements, over what new political superstructures and class relations will prevail. The outcome of this fight is nearly impossible to foresee even in general terms because there are so many warring factions:
o The regime (NDF, Syrian Arab Army).
o Foreign regime allies (Hezbollah, Iraqi and other foreign Shia militias).
o The rebels (FSA, Islamic Front, Syrian Revolutionary Front, independent Islamist and secular brigades).
o Foreign rebel allies (small groups such as Jamaat Ahadun Ahad or the Chechens who defected from Daesh).
o Jabhat al-Nusra.
o Daesh.
o The Kurds (the People’s Protection Units [YPG], a militia dominated by the secular-democratic and socialist Democratic Union Party [PYD]).

Some of the aims and interests of these actors overlap; others contradict each other irreconcilably. The regime, its foreign allies, and Daesh have benefited from the rebels’ failure to reconcile their serious differences with YPG and PYD for the purpose of uniting to smash the three enemies that menace them. Even worse, throughout 2013 Islamist and FSA brigades fought alongside Daesh as Daesh attacked the YPG. This strengthened the rebels’ enemy, alienated and weakened a potential ally, and deepened Syria’s fragmentation.

As of Aug. 1, 2014

Since the regime and Daesh both focused almost all of their attacks on rebel forces in early/mid 2014 instead of on each other (Daesh-regime clashes constituted only 5% of the total battles fought in Syria in June 2014, for example), many activists and even the Syrian National Coalition of Revolution and Opposition Forces claimed that the two were partners or co-conspirators. What appeared to be conspiracy was really the result of strategic calculation born of a particular conjecture. For its part, the regime knew that the demographics of its strongholds made Daesh rule there all but impossible and prioritized fighting the rebels as the only force that could potentially generate enough broad-based support to supplant and displace it. Meanwhile, Daesh opportunistically preyed on the weakest actors on the political landscape — the scattered, divided rebel movement and the beleaguered institutions of bourgeois-democratic governance that arose in rebel-held areas. Riven by the competing priorities of fighting versus governing as well as internal dissension, rebel and opposition forces were no match for the united and better-led Daesh as they eliminated rebel factions first before suppressing civilian activism in al-Raqqa as well as Manbij, the birth place of Syria’s first labor union.
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The defeat of rebel forces has not given way to peace between Daesh and the regime but to an even more barbaric war between them, a war the regime is losing and will lose in northern and eastern Syria. This proves that Daesh was never a puppet nor a partner of the regime (or a creation of Iran, for that matter).

Since the battle of Qusayr in June 2013, the regime’s military momentum has masked the loss of its social and economic foundations. The old regime’s power peaked in 2011 and the post-revolution regime’s power — fueled by massive foreign support — peaked in mid 2014, checked by its own internal contradictions and by the growing power of Daesh.

The rebels’ military momentum lasted from 2011 until they entered Aleppo in mid 2012 and liberated al-Raqqa in early 2013, at which point their internal contradictions impeded further progress. Lack of unity, organization, and effective leadership prevented the rebels from securing the socio-economic foundations upon which to erect the kind of sturdy bourgeois-democratic state necessary to govern liberated areas and simultaneously wage a protracted and victorious revolutionary war.

This failure by the rebels led directly to the Daesh’s disastrous success. The revolution is the negation of the regime and Daesh is the negation of the revolution.

By seizing income-producing assets like oil fields, Daesh not only acquired the economic basis for a state even more fascistic than the Assad regime but — more importantly — prevented the rebels from becoming a self-financing force. This put the rebels at the mercy of the foreign agendas of foreign states who are the only social forces with access to the necessary money, arms, and support to sustain the civilian and military opposition. So unlike both the rebels and the regime, Daesh is economically viable and financially self-sustaining. This has profound implications:
1. No outside power has leverage over Daesh.
2. Daesh’s economic underpinnings mean that its inherent war-fighting capabilities are significantly greater than the inherent capabilities of both the regime and the rebels. “Endless money forms the sinews of war.” (Cicero)
3. Daesh’s rule will endure because its economic foundations are secure; the political monstrosity it is building unfortunately does not contradict but corresponds with its economic base.

Assad’s crumbling fascist edifice was torn down in much of northern and eastern Syria only for a more savage and firmer one to be erected in its place.

However, Daesh is not invincible; it has strong and weak points (or in other words, contradictions) just as its enemies do. Daesh’s weak points are less serious than those of rebel and regime forces and it has far more strong points than weak points compared to both of them which is why Daesh can beat them (and its Iraqi enemies) on many fronts simultaneously.

Daesh Weak Points:
o Unjust cause.
o Popular support based on rebel inability to provide security and stabilit yrather than ideological agreement.
o Manpower.
o High proportion (perhaps a majority) of its fighters are non-Syrians.

Daesh’s power has yet to peak and may not do so until U.S. President Barack Obama leaves office. Its leaders are careful not to over-extend their 20,000-man army, wise enough to attack only targets that have significant strategic value in situations where Daesh’s victory is not a gamble, and shrewd enough to mix force with diplomacy to secure the support of tribes in eastern Syria and Western Iraq. If Daesh’s leadership is more united, effective, and competent than that of the rebels, it because they they have been waging war uninterruptedly for almost a decade, long before protests broke out in Syria in 2011. Rebels and oppositionists must close this experience gap if they want a fighting chance at taking their country back from Baghdadi’s gangs.
The fate of the Syrian revolution was once in the hands of doggedly non-violent grassroots activists, but today it is in the hands of men with guns and the foreign powers that back them. Now, war is the main form of struggle and army is the main form of organization. The armies of three sides — the regime, the rebels, and Daesh — are locked in a war of attrition and the side that is exhausted materially and spiritually first, loses.

The contradiction between the regime’s military superiority and social infirmity will not last forever, nor will it end soon; it is a process of unravelling that will take years rather than months. Militarily inferior rebel and opposition forces are, in many respects, in worse shape socially than the regime as small numbers of (unpaid) rebels quit the battlefield for the sake of giving their families some normalcy after three long years of hellish war and as increasingly depopulated neighborhoods buckle and submit rather than starve. At the same time, the only neighborhoods that have become safe for regime forces are those totally emptied of both people and rebels such as Homs; true submission on a mass scale continues to elude the regime despite its barbaric tactics.

As the increasingly exhausted regime fights to exhaust its opponents, the regime’s forces are slowly being ground to dust by a combination of its own unjust nature, aims, and methods, its manpower shortage, the rising power of Daesh, the determination of millions of revolutionary Syrians to persevere in their opposition to Assad despite unimaginable suffering, and the gradual escalation of U.S. support for rebel and opposition forces. If the rebels (and Kurds) can unite, they can take advantage of these factors that work in their favor to break the war’s strategic stalemate which will force the regime to choose between holding one city or military base at the expense of losing another. As retreats and defeats mount, Assad’s rump regime will fragment and conditions will ripen both for palace coups and for a second revolution.

Note by C21styork: I think the earlier instalments stand up well over the 30 years since they were written but this section, on revolution, begs the questions as to why, over more than three decades, there is still no real interest in revolution in the advanced capitalist societies. The slogan ‘Smash capitalism’ was more popular back in the late 1960s when a significant minority of leftists (and the state’s intelligence agencies) did take the notion of revolution seriously – yet that was a time also of post-war economic boom. Now, in the C21st, capitalism is in decline to such an extent that the basics that are lauded by social-democrats, such as free public health and free education, can only be funded on the basis of debt. The zombie system is kept alive by government support and the ideal of the ‘free market’ is – or should be – exposed for the utopianism that it is. In places like Greece, people are angered by austerity measures, and throw rocks at banks. But that is frustration, not revolution. Meanwhile, in Australia and other advanced economies, what passes for left-wing thinking continues to obsess about the weather…

* * * *

“These days people are rightly cynical about the “policies” and “programs” of political parties, whether “revolutionary” or not. Revolutionary Leninist ideas are widely discredited by the sterility of their apparent supporters, and Marxist concepts that sum up important truths from the history of revolutionary struggle seem empty because they have been repeated so often as banalities. One hesitates therefore to use the word “program”, let alone “party”, for fear of being taken for yet another loony with pat simplistic answers to all the world’s problems”.

Part 7: Revolution

We Need a Program

Expropriating Big Business

Central Planning

Labour Policy

The Struggle for Control

Socialist Management

Investment Planning

Draft 4. August 1982

(Note: A number of comments on earlier drafts of this section have pointed to the conclusion that it really ought to be rewritten completely. However, it seems better to get the thing out, and allow others to comment as well. Please bear in mind that this was originally intended to simply round off the paper “Unemployment and Revolution”, by suggesting that revolution is a more “practical” solution to the problem of unemployment, than the various other “left” schemes to deal with it, that were analysed there. It is not intended to satisfy people’s desires for a meaningful answer to the general problem of “revolution”, but merely to say something about what a revolution could do about unemployment. Unfortunately everything, like everything else, is related to everything, as well as being a class question…, which makes it very difficult to complete an acceptable article about anything…)

In its normal state, capitalism has become an obsolete oppressive system that ought to be got rid off. A relatively small minority recognise this and are consciously anti-capitalist, but the masses continue trying to satisfy their needs within the system rather than by overthrowing it. So there is no real possibility of overthrowing that system and attempts to do so degenerate into futile reformism and/or terrorism, whatever the “revolutionary” rhetoric.

But during periods of economic crisis, the contradictions of capitalism sharpen and the possibility of actually getting rid of it arises. A substantial proportion of the population is drawn into active political struggle as they confront questions of what society is to do to get out of its impasse. There is no crisis that the ruling class could not resolve if it was allowed to, but with the masses politically active, the possibility arises of the ruling class not being allowed to, and of people taking things into their own hands.

In boom conditions, capitalism develops the productive forces at its maximum rate. That may be far slower than would be possible for a communist society, but there is no basis for comparison, so the obstruction is not so noticeable.

The “development of the productive forces” is not some abstract question. It means concretely that the wealth of society is increasing, not just materially, but also culturally and in every direction. Opportunities for development are open and people who want to better their own situation can do so by grasping those opportunities. Most workers can expect better jobs, with a higher standard of living and better conditions. Capitalists can find opportunities for profitable investment. International trade is expanding and the different nations, classes and sectional interests are fighting over their share of an expanding “cake”. Such fights may be acute, but there is always room for compromise about who benefits more, when nobody is actually asked to accept being worse off than they are already. Reforms may be fought bitterly, but there is scope for reform without shaking the whole system apart. Within a “pluralistic society”, there can still be “consensus”.

In crisis conditions all this is reversed. The cake is contracting and the fight is over who is to bear the loss. Among capitalists the fight is over who is to survive and who is to eat whom. Between capitalists and workers there is no room for compromise. Reforms become impossible and even past achievements may be rolled back. “We can’t afford these luxuries any more”. Within the working class too, there is less unity as people find themselves in “hard times” where it is “everyone for themselves”. The “social fabric” unravels, consensus breaks down and capitalist society stands revealed as based on sharply antagonistic interests.

The last major capitalist crisis was the Great Depression of the 1930’s. Subsequent economic fluctuations; including the present one, have not amounted to much more than “recessions”; so the inevitability of capitalist crisis has been forgotten until the next crisis again smashes the illusion. But even in “recession”, the sharpening of contradictions can be seen, together with the complete inability of the reformist “left” to come up with any serious alternative program. All the signs point to a gathering crisis, much deeper than the 1930’s, and the necessity for a serious revolutionary alternative opposed to trying to patch capitalism together again.

Internationally, overproduction intensifies the struggle for markets between imperialist nations as well as between individual financial groups. International conflicts that could have been resolved peacefully become intractable because the economic barriers have gone up and there is no room to manoeuvre. The “underdog” or “latecomer” imperialists can no longer hope for a place in the sun by peaceful competition in an expanding market. They can only expand at the direct expense of the established “status quo” powers and so they seek a re-division of the spoils by force. Despite its costs and risks, for them war becomes a more attractive alternative to economic collapse.

On questions of war and peace, the general “left” attitudes are perhaps even worse than the whining domestic demands that capitalists should continue running things but should do so more humanely and with less unemployment. Just as they shut their eyes to the real impossibility of continuing capitalist prosperity and “demand” a boom economy, they also shut their eyes to the real inevitability of imperialist war and “demand” peace. Pretending that the Soviet superpower is not aggressive, and that its arms build-up is not preparation for war, but a figment of Reagan’s imagination, becomes another way of avoiding the critical issues of war and revolution.

Workers have no stake in the existing imperialist division of the world nor would they have a stake in the proposed new one, they do however, have a stake in opposing aggressive predatory wars and the accompanying overt denial of national and democratic rights. (The first world war was a different situation not arising directly from an economic crisis, in which both sides had essentially similar expansionist aims). As we had to fight the fascist powers in the second world war, we would have to fight any fascist power that launched a third world war. (Although the Soviet Union still describes itself as “socialist, if it actually launched a third world war, the correct description of “social-fascist” would be more widely understood.)

If we fail to defeat social-fascist war preparations, we could be stuck with fascist domination holding up social development for decades. If we fail to organise independently around our own revolutionary program, we could be stuck with social development continuing sporadically in capitalism’s self-contradictory manner, lurching forward to the next crisis and the next war. If we get our act together, while the bourgeoisie’s act is in a mess, then we have a world to win.

All this relapse into the barbarism of crisis and war occurs as on obvious result of capitalism itself. Workers are unemployed, goods and services are unsaleable, plant capacity stands idle, and consumers are forced to do without, for no “unavoidable reason”. All that stops the continued expansion of wealth and opportunities is the capitalist system of production for private profit. All that is needed for the unemployed workers to use the idle plant to produce goods that people want and need, is a communist system of production for use instead of profit.

We Need a Program

Obviously we are not in a revolutionary crisis right now, and no question of overthrowing any western government arises immediately.

But a major economic crisis and/or a world war would certainly lead to a revolutionary crisis. The question of an alternative to capitalism will certainly be posed. Capitalism will survive if we let it. Crises can resolve the contradictions temporarily and allow a new period of expansion until the next crisis. The outcome of the 1930’s crisis was the post-war boom, not communist revolution in western countries. In retrospect this appears hardly surprising, since the Communist Parties devoted themselves to fighting fascism on a purely defensive basis, and advanced slogans like “Make the Rich Pay” that implied no intention to abolish capitalism.

In its present state of confusion, the left in advanced countries is hardly capable of even fighting fascism let alone challenging the bourgeoisie for power, let alone winning that challenge. There is even a strong tendency to be “soft” on social fascism and adopt a tolerant, apologetic or defensive attitude towards the overt denials of national and democratic rights by the Soviet Union. This can only make it easier to undermine those rights in the West as well. Certainly no movement unable to defend bourgeois democracy against (“socialist”) fascism can hope to overcome the limitations of bourgeois democracy and replace it with communism.

Fortunately however, the confusion on the left is so great there is at least a chance the existing “left” movements and ideologies will disintegrate completely before the actual crisis breaks out, and there will be room for something new and genuinely revolutionary to emerge.

The task of building a revolutionary left is at present primarily destructive – exposing and undermining the reactionary ideology of the present “left”. But we need to at least think about construction at the same time. The aim of destruction is to open the way for a revolutionary left that is fighting for progress rather than reacting against capitalism, and that is quite serious about winning political power to actually implement the social changes it is fighting for, instead of whining about the present rulers of society.

It has been said often enough that there can be no blueprints for the future because the people themselves will decide how to build the new society as they are building it. Fundamentally I agree with that, and will therefore refrain from attempting to present any blueprints. Nevertheless, it is appropriate to put forward a few ideas for discussion about what a revolutionary government might do to start building socialism. Consistent refusal to do so suggests that we are not fair dinkum about having an alternative. “No blueprints” is often a cop-out excuse for “no ideas”.

Revolutionaries need to have a “program” that is more than an analysis of the present society and a promise for the future. We need to develop a clear statement of the concrete measures a revolutionary government would aim to take, so people can decide whether or not they want to fight for a revolution. Too many “parties” talk about “revolution” in the abstract, and none at all seem to be serious about it concretely.

These days people are rightly cynical about the “policies” and “programs” of political parties, whether “revolutionary” or not. Revolutionary Leninist ideas are widely discredited by the sterility of their apparent supporters, and Marxist concepts that sum up important truths from the history of revolutionary struggle seem empty because they have been repeated so often as banalities. One hesitates therefore to use the word “program”, let alone “party”, for fear of being taken for yet another loony with pat simplistic answers to all the world’s problems.

Nevertheless, in a crisis situation, people will judge according to how the measures proposed by revolutionaries compare with those advocated by the existing regime. It will be a very real life and death question for a revolutionary party to have clear policies to deal with unemployment and similar questions. If the revolutionaries do not form a political party that aims to take power from the old regime then the old regime must continue. It will not just disappear in a burst of anarchist enthusiasm. If the revolutionary party does not propose policies that are more desirable and effective than those of the old regime, then why should anyone support a revolution? Even if there was a revolution, there would be a counter-revolution when the new regime failed to solve the problems that had discredited the old regime in the first place.

So, we need to go beyond denouncing what the existing regime is doing and start offering constructive alternatives, even though any such proposals are bound to be half-baked at this stage. Reformists will make constructive proposals as to how the present regime should deal with problems, with or without a change in the political parties administering the regime. Revolutionaries will make proposals about how a new regime, a workers’ state or “dictatorship of the proletariat”, would cope with these questions.

Only left sectarians will talk about revolution in the abstract, without having in mind anything so mundane as taking political power and running the joint. But unfortunately the “revolutionary” organisations in western countries are overwhelmingly sectarian. Their concern is to defend their own organisations and “principles” and not to make revolution. A discrete veil is usually drawn over the question of what a revolution might actually do about unemployment or anything else for that matter, because the alleged “revolutionaries” have no idea what they would do, and have not even thought about it. This does not worry them much, because they are not serious about actually establishing a new regime, but only wish to denounce the present regime more extravagantly than a “mere reformist” would denounce it.

So, let us talk about what communist revolutionaries should do, if we had the political power to do it. No doubt anarchists will disapprove, and insist that discussion of government policy implies we are bureaucrats no better than the old regime. But the choice society faces at present is between revolutionary government or counter-revolutionary government, and the road to abolishing all government lies first through establishing a revolutionary government (but certainly doesn’t end there). Therefore if we want to eventually abolish the state, we need to start exchanging views about proposed government policy now. The reformists talk about government policy because they are perfectly serious about governing, and there is nothing “unrealistic” about this intention of theirs. Revolutionaries should do so too, for exactly the same reason. Those who disdain to talk about government policy obviously have no belief in either reform or revolution, but only a slave’s inclination to whinge occasionally.

The discussion below will not go into the many problems of building a new society and transforming human nature. It will not sketch any exciting vision of how wonderful a new society could be, but will discuss the more mundane problems of what a revolutionary government could do about unemployment in a society that still had not been transformed. Obviously this is not the main point of a revolution. It would be just as boring to have a revolution simply against unemployment as it would be to have one to improve living standards. But this is an article specifically about unemployment.

In the first phase of communist society, the period generally known as “socialism”, there would still be wage labour and commodity exchange through money. It would be quite impossible to abolish these social relations left over from capitalism all at once.

People would not work if they were not paid for it, and they would grab whatever they could get if they did not have to pay for what they consumed. Production would still be geared to market exchange. Basic social relations would still be bourgeois. There would be a bourgeois society in which the bourgeoisie no longer held political power.

A revolutionary government would presumably come to power only as a direct result of a profound political and social crisis, like the last Great Depression. Very likely too, it would arise in the aftermath of a devastating world war. Either way, or both ways, the new regime would be faced with severe economic dislocation including unemployment, as well as all the problems of a regime born in civil war. So what should it do about unemployment?

Obviously a revolutionary government should not attempt to deal with unemployment by any of the methods currently proposed from the labour movement. It could not simply reduce working hours, or raise wages, or increase government spending etc. From the previous analysis we know that these measures would not work in a market economy.

“Revolution” does not mean that we would “demand” that the multinationals do this or that. It means that we, the working class or its advanced sections, take over the running of industry and make the decisions ourselves. To eliminate unemployment, a revolutionary government would have to proceed with abolishing the market economy.

That will be a long struggle and there will certainly be setbacks. The democratic revolutions in Europe were spread over hundreds of years interrupted by various wars and counter-revolutions. They culminated in the establishment of the modern imperialist powers and not some “utopia”. That result was a lot better than the medieval feudal societies that existed before. The democratic revolution was worthwhile and the sordid power struggles undermining feudal power were important. The Russian and Chinese revolutions suffered reversals too. But they, and their power struggles, were worthwhile. The coming Communist revolution will also be protracted and tortuous. But it has to start somewhere and we ought to be discussing it now.

It may seem odd to be discussing concrete economic policy for a regime that is nowhere near existing yet. But it is no more odd than the usual discussions of how to make capitalism work better, or how to retreat from it.

Expropriating Big Business

The first step towards abolishing the market economy and eliminating unemployment, would be to establish state control of the labour market by expropriating the big businesses that employ the large majority of workers. It would not be a matter of “kicking out the multi-nationals”, but of taking them over, and advancing on the basis they have already laid.

Most likely it would have to be done on an international scale. The world economy is already “transnational” and we certainly would not want to retreat from that to any kind of economic autarchy in the name of “independence”.

Expropriation of capitalist property obviously relates to what the revolution could do about many other concrete problems as well, and also relates to implementation of the maximum program, towards socialism and communism. But in an immediate sense, the state taking over most industry is not in itself socialism, but can be state capitalism. It is only a pre-condition for socialism and a pre-condition for abolishing the market economy. Nevertheless, we will not discuss other aspects of the transition to communism here.

In Australia, like other advanced capitalist countries, a very large part of the labour force, about one third, already work for the state at one level or another, or for public corporations like Telecom, or government owned corporations like Qantas. These are already state capitalist industries.

Most of the rest of the labour force is employed by large corporations, often transnationals, whose owners play hardly any direct role in administering them, but are purely passive shareholders or bondholders. These firms could be converted to state capitalism by simple decrees transferring ownership to the revolutionary government, and by the cancellation of government debts. They would remain capitalist because they would still be employing labour to use it for making profit by selling goods on the market. But expropriation without compensation would undermine the economic basis of the old bourgeoisie, and pave the way for communism. It would make the state responsible for hiring and firing the bulk of the Australian labour force, and therefore place the state in a position where it could take responsibility for employment and unemployment.

Many other workers are employed by small firms that are really little more than outside workshops for the big corporations, or “self-employed” in the same, completely dependent, situation. It would be difficult to simply establish state capitalism in these enterprises by decree. But taking over the big corporations on which they are dependent, means making them dependent on state owned enterprises. Control of the big firms would make it possible for the state to influence hiring and firing by the small firms, and so establish state control of that part of the labour market indirectly.

Naturally there is no great problem for a capitalist state to nationalise capitalist industries when it is necessary to the continued survival and development of capitalism – and no great benefit either. A revolutionary state doing it for revolutionary purposes is another matter.

The major obstacle to all this would of course be the state power of the previous regime, including local and foreign armies, navies and air forces, as well as terrorists, saboteurs etc. But we are talking about measures to be taken by a new state that rests on the power of the armed working class, so we may assume that these obstacles are being overcome through revolutionary civil and national war.

There are still a number of major economic obstacles that would persist even after victory in a revolutionary war. Let us look at a few examples.

First, the directors and top management of big industry, whether public sector or private, would side with the present ruling class against a revolutionary government. Unlike the owners as such, these people do play an important role in the actual organisation of production, and can not simply be dismissed by decree.

Second, many lower level executives, engineers, public servants and so on, who play an essential role in production, could not be relied upon by a revolutionary government, even though they have no direct stake in the other side. They see themselves, and are seen by others, as “middle class” (although their real status might be better described as upper strata of the proletariat, since their income is obtained from wage labour, not property ownership).

Third, there are substantial sectors of the economy, even in the most advanced capitalist countries, where people are still self-employed or work for small employers who do play a direct and important role in the actual organisation of production – for example, farmers, shopkeepers, professionals such as doctors, and a good deal of small manufacturing, construction and services enterprises. These could not simply be taken into government ownership be decree, nor are they all directly dependent on firms that could be. They would have to remain for some time as a “private sector” (quite different of course from the present “private sector”dominated by huge transnational corporations).

Certainly capitalism is already replacing small shopkeepers with supermarket chains, and family farms with agribusiness. Doctors will eventually be forced to work for salaries and so on. But it takes time, and a workers’ state would want to do it less blindly and destructively, and with more attention to the problems faced by the people concerned, than under capitalism.

As long as there was a private sector, relations between it and the state sector would have to be based on commodity exchange through money, and this would remain true even when privately owned businesses were being transformed into co-operatives as part of the process of socialisation. In connection with the private sector, there would still be a labour market. This would continue until the state sector was able to offer jobs doing everything that needs to be done, on terms more attractive than the private sector. That could be quite a long time.

Fourth, there are links between the ownership of bigger industries and smaller ones, and even links to the savings, superannuation and insurance funds, and housing and consumer finance, of ordinary workers and working people. We cannot simply expropriate shareholdings and assume we have hit only big capitalists.

These problems all have to be faced up to, if we are serious about solving unemployment, because we cannot solve unemployment without expropriating capitalist private property in this wholesale way. International ramifications are left aside, on the assumption that we are talking about some sort of world revolution, at least in the advanced capitalist countries together. But that whole question needs to be gone into as well.

It may be repetitive to again emphasise that eliminating unemployment requires wholesale expropriation of capitalist private property. But usually this central point is left out entirely. The “socialists” and “communists” who agitate about unemployment without focussing on this issue, must in fact be demanding a solution within capitalism. They could not possibly believe in socialism or communism, or they would mention it at least occasionally, if only in their prayers.

Central Planning

Assuming we are able to solve the above problems, how would the establishment of state capitalism allow the revolutionary government to deal with unemployment? And how could it avoid becoming some drab,boring and repressive system like East Germany?

Economically, it would be a “fairly straightforward”(!) question of subordinating the state capitalist enterprises to a unified central plan, instead of production for the market. Socially and politically, this would be part of the same process that transforms capitalist production for profit into communist production for use, and wage labour into communist labour for the common good.

Since most workers would be employees of state enterprises, “manpower planning” or rather “labour force planning” could be carried out seriously. Instead of independent hiring and firing from a pool of unemployed, there would be a planned allocation of labour. Individual workers would all be permanent employees of the public service, not liable to hiring and firing as in private industry.

At present, about 5% of the labour force are in career public services and there are also career services in some corporations like Telecom and BHP. In general these workers do not get hired and fired according to the needs of capital investment in their industries. Their firms manage such a large sector of the economy in a centralised way, that they are able to engage in labour force planning alongside their other investment planning and transfer and promote workers within the firm’s career structure. There seems no reason why similar personnel practices could not be very quickly extended from 5% of the workforce to 80% or 90%, thus establishing complete state control over the labour market. (A large section of the Japanese labour force are “permanent” employees already, with another large section being “casuals”to provide the slack necessary in a market economy).

This would not in itself eliminate unemployment, as witness the present staff ceilings and cutbacks in the public service, and the redundancies from the state sector dominated economies of the Soviet bloc and China. But it would create the minimum organisational prerequisite for the government to take responsibility for unemployment. After all, if the government is not the main employer, it is not responsible for employment, so how can it be responsible for unemployment?

As well as control of the labour market, the revolutionary government would have in its hands, all the operating revenue and profits of big industry, and therefore the decisive funds for investment. Instead of the present anarchic distribution of investment through the capital markets, there could therefore be a planned allocation through the state budget. This, and this alone, makes it possible to eliminate unemployment, simply by making full employment an essential criterion of planning. As long as firms decide their investments privately, and hire and fire accordingly, there can be no real “labour force planning”. Once investments are centrally allocated, then the labour force can be planned too.

A single central plan would co-ordinate the requirements for labour of different occupations and skills in each industry and locality, and indeed in each establishment. The plan would take into account changes in labour force participation, the education system, immigration and emigration flows etc. The same plan would allocate funds for investment, together with the labour force required by that investment.

Far from discouraging new technology, to save jobs, the plan would facilitate its speediest implementation, to provide leisure. But the same plan that provided funds for a labour saving innovation in a particular industry or establishment, would also provide for the transfer and re-training of those workers made redundant, and the investment of funds in the industry that is to employ them, or the reduction in working hours that goes together with increased productivity.

The decisive point is that things would not just be left to “sort themselves out” through the interaction of wages, prices and profit rates on investment, and the consequent formation and absorption of a pool of unemployed. No matter how much state ownership and “planning” there may be in a market economy, if production and investment decisions are at all regulated by “the market”, they must to that extent be allowed to “sort themselves out” through market movements, including unemployment.

A fundamental distinction should be recognised, between this kind of central planning, in a state owned economy, and the sort of bureaucratic planning implied by “statist” proposals mentioned earlier. Here we are not talking about government “controls” imposed on separate, privately owned enterprises from above, while those enterprises are still basically geared to employing workers to produce goods for sale at a profit on the market. We are talking about a transformation of the enterprises themselves, in which they cease to be separate entities, and become social property working to a common social plan. That involves a political struggle, by the workers in the separate enterprises and in the whole society. It implies a social revolution as profound as abolishing the ownership of slaves by slaveowners.

The same distinction should be recognised between the central planning we are talking about, and that which exists today in the Soviet bloc and China. The “economic reforms” of the 1950’s in the Soviet bloc, and more recently in China, established the same kind of relationships between central planning authorities and separate enterprises geared to the market, as were described as “statist” rather than “socialist” in section 6 above. Some forms remain similar to socialist central planning, but the content is commodity market relations and even the forms increasingly resemble those common in the west.

The injustices of slavery and serfdom were eliminated by abolishing the social institutions of slavery and serfdom themselves, not by prohibitions against maltreatment of slaves and serfs. The injustices of wage labour, including unemployment, will be eliminated by abolishing the social institution of wage labour itself, not by directions to employers to treat their workers better.

Labour Policy

The planned allocation and transfer of labour need not be bureaucratic like the present public service, although it probably would be at first. It can be made far more flexible than the freest labour market, simply by leaving enough vacancies unfilled all the time, to allow a wide choice of jobs. Industrial conscription has been required in both capitalist and socialist economies under wartime conditions, but it can never be the peacetime norm in any post-feudal society.

Under capitalism, easy job changing only occurs in boom conditions. In a planned economy it can be deliberately maintained all the time, at the expense of some loss of efficiency in the establishments that have unfilled vacancies (but with an overall gain in efficiency due to labour mobility).

Imbalances would inevitably occur, but could be corrected by revision of the plan. Apart from other miscalculations, the plan would also have to take into account unplanable variations in the demand for labour by the relatively small private sector, just as it would also have to correct for other anarchic movements in market forces generated from that sector.

Even capitalism is normally able to maintain an approximate balance between the demand and supply for labour, with only the market price mechanism as a regulator. So there seems no reason to doubt that unemployment could be rapidly abolished with central planning. This has been the case even in relatively backward socialist countries like China, where the state sector was a relatively small part of the economy compared with agricultural co-ops. Only since the widening of market relations between separate enterprises has mass unemployment become a problem there.

In advanced capitalist countries like Australia, a revolutionary government would immediately have control over a far larger state sector than either the Soviet Union or China had when they were socialist. The remaining private sector would be insignificant in comparison, so there should be little problem.

At first however, the relations between state owned enterprises would still be market relations, just as the relations between Qantas,TAA,Vicrail and the SEC are market relations today, with all the anarchy and waste that implies. The struggle to subordinate them to the plan, would be part of the struggle to solve the basic economic problems of transition to communism.

Simply directing state owned enterprises to adhere to a central labour force plan could not work while they were still basically oriented towards a market economy. If the products have to be sold on a market, and there is no market to sell more of that product, then its no good having the government telling a state owned firm to hire more workers. Those workers might just as well be paid unemployment benefits direct – their services are not required.

Labour force planning can only work to the extent that labour power is not a commodity that is purchased to produce other commodities for sale on the market. When production is being carried out by society as a whole, rather than by separate enterprises engaged in commodity exchange, then society can allocate its labour time,as well as other resources. To the extent that separate enterprises exchange their products, then they must buy their labour power too, and to the extent that labour power is bought and sold, it cannot be allocated according to a central plan.

A necessary requirement for centralised labour force planning would of course be centralised wage fixing. Enterprises could not be free to determine their own wage rates if labour is being allocated between them according to a central plan. Otherwise the allocation of labour would be influenced by wage rates as in any other market economy. At the same time, as long as people still work for wages rather than for the public good, wage incentives will be required to attract workers from one industry or occupation to another, if unemployment or other forms of coercion are not to be used.

Clearly wages and wage relativities must be fixed centrally – as though the present Arbitration system really did perform the function it purports to. But this also implies moves towards an abolition of wages as payment for the sale of labour power.

In a fully communist society, income would not depend on “wages” at all. Instead of price and wage fluctuations and unemployment, any imbalance in economic planning would simply result in shortages in facilities available for people engaged in various projects, and/or surpluses of things people do not really want. Annoying, but not a major social problem.

But even in the early stages of transition, wages could conceivably be paid directly from the central budget, together with other “welfare” income. In that case enterprises would not “hire” their labour force directly, but from an employment bureau (as occurs now with some kinds of labour such as temporary staff). The rates paid by firms to the employment bureau need have no direct relation to the combined wages and welfare payments paid out of the state budget to the workers concerned. Imbalances can result in state subsidies to employment (or penalties on it), rather than unemployment (or labour shortages).

Similar proposals have been made for capitalist governments to encourage or discourage employment by altering taxes on wages. But there is really very little scope for that when the government’s own revenue is dependant on those taxes. Moreover such adjustments could not cope with mass unemployment due to overproduction. It is a very different matter when the government revenue coincides with the whole revenue of big industry, and when central planning ensures a basic balance between production and consumption, leaving only minor deviations to be compensated.

When production is geared to social needs rather than profits, it is quite feasible to cope with increased labour productivity by simply reducing the hours of work required for given wages. Eventually, as technology continues to develop, and social attitudes change, very little work would be performed in “exchange” for wages. But from quite early on, the funds available for investment and job creation would not depend on profits, but could be allocated, just like wages and welfare payments, directly from the total revenue. Productivity increases that increase the total revenue can be used any way society wants. Cutting working hours in a non-market economy would not have the “paradoxical” effect of choking off investment and increasing unemployment due to reduced profits. Nor would increasing foreign aid or social welfare or wages have that effect. The total size of the “pie” would be the only constraint once there was no mechanism for the economy to “jam up” whenever “profits” had an insufficient slice.

With the transition from wage labour to communist labour, an increasing proportion of incomes would be based on needs (or desires), rather than payment for work (as a matter of right not charity). Correspondingly, work would have to be an increasingly voluntary activity. Wage and welfare increases, and reduction in working hours, could then be planned together with the necessary investments in consumer goods industries, with additional flexibility provided by the increasing “social wage” of”public goods”. When work has become a voluntary community service, there is of course no question of a “labour market” to require a “labour policy”.

In making the transition, it would be necessary to arrange social services, foreign aid, public benefits, wages, insurance and housing and consumer finance, as well as investment, as allocations from total revenue all at the same time. In expropriating big industry, the revolutionary government would take the whole of that revenue into its hands directly, including those “profits” previously paid out through taxation or via insurance funds to provide pensions etc.

Universal social welfare coverage financed from current revenue rather than “funds”, would compensate for most “savings” tied up in shareholdings etc, and small property owners could have their property redeemed rather than expropriated. The maximum number of people should gain from the expropriation of big industry and only a tiny minority should be losers. “Labour Policy” would have to embrace policy on these questions too.

The Struggle for Control

The social revolution required to transform capitalist enterprises into communist collectives obviously involves far more than government decrees transferring ownership. The revolution itself would have produced workers’ councils in many establishments, which would have taken over responsibility for management from the previous authorities. But that only establishes pre-conditions for the transformation, without actually solving the problem itself. Moreover, in many enterprises the workers’ councils would be weak or non-existent, or a screen behind which the old bosses are still in charge, since revolution develops unevenly.

While the left is in opposition, it seems natural to assume that all problems of control should be resolved by “decentralisation of authority”. After all, the people in charge at the top are reactionaries, so the more room there is for lower level units to determine their own affairs, the more chance there is to adopt more progressive policies in at least some places where radicals happen to be concentrated. The problems in other places, where radicals have no influence at all, are simply not worth even thinking about. Often a focus on “local” or “community” issues seems to reflect an acceptance that there is really nothing we can do about national and international issues.

With a revolutionary government in power, the situation should be reversed. The highest levels of the hierarchy should be more radical than the lower levels, and radicals at lower levels would be demanding obedience to government directives aimed at changing the social system, rather than agitating for autonomy where that would mean continuing in the old way. (Of course this can change, if the revolution is defeated and the “revolutionary government” ceases to be revolutionary – but that simply means the radicals are in opposition again – it does not mean that the whole problem could be mysteriously avoided by “decentralisation”.

Anarcho-syndicalists seem to imagine that if everybody democratically discusses everything, production units will be able to exchange their products to supply each other’s needs, and to supply consumer goods for the workers, with no more than ‘co-ordination” by higher level councils of delegates from the lower level establishments. Actually things are not so simple, and any attempt to realise that vision would only mean preserving market relations between independent enterprises, still not working to a common social plan. The concept involves a sort of “parliamentary cretinism of the workplace”, even though anarchists and syndicalists are generally well aware that the right to vote can not in itself transform bourgeois social relations into co-operative ones.

So far, modern big industry in the advanced capitalist countries, has always been based on capitalist production for profit, and nobody actually has much experience in how to run it any other way. Indeed many people allegedly on the “left” seem to be unable to conceive of it being run any other way, and dream of somehow going back to a smaller scale of production, for it to be “more human”. On the contrary, it was precisely small scale production that was suitable for capitalism, while the development of huge transnational corporations with a single management for entire sectors of the world economy, proves that the socialisation of production makes private ownership an anachronism.

The only experience we have of communist labour for the common good has been in a few “community projects” providing voluntary services to the public. Everything else is based on people working for wages under the supervision of bosses to produce commodities for sale on the market. Often voluntary community projects also end up adopting a boss system too, or remain hopelessly inefficient and get entangled in factional disputes that can not be resolved without a clear chain of authority, and in effect, “ownership”. Then they go under and reinforce the idea that capitalist production is the only system that can really work.

We should study the positive and negative lessons of the way small scale community projects and co-ops are managed, as well as studying capitalist management of big industry, in order to prepare for transforming the management of big industry. The mentality that equates “popular”, “democratic” and “co-operative” with “local” or “community” projects is a slave mentality that accepts the necessity of a bourgeois ruling class to manage big industry and the affairs of society as a whole. We do not just want to create some free space within which slaves can manage some of their own affairs, although that may sometimes be useful. We want to overthrow the slave owners and abolish slavery altogether.

If modern industry is to be run in a fundamentally different way, then essential policy and planning decisions to run it in that different way will have to be taken by somebody. Whether they are called the workers council, the revolutionary committee, or the state appointed management, somebody will have to take decisions about the sort of questions currently decided by the boards of directors and top management of BHP, the ANZ Bank, the Treasury and so on. More importantly, people will have to take decisions about economic, as well as other questions, currently resolved by the boards of directors of General Motors, ITT, the Chase Manhattan Bank, the Morgan Guarantee Company, Mitsubishi, the Central Committee of the CPSU or CPC and so on. Even more importantly, we will have to take decisions about questions which none of these bodies have the power to decide, since none of them controls the world market, either separately or together.

No amount of elections from below, directives from the revolutionary government, or consultations with the masses will change the fact that these people will be responsible for the policy decisions in industry and will have to know what they are doing. Nor would it change the fact that they are doing the job currently done by capitalists “bosses” and will have ample scope to develop into new capitalist bosses themselves (and bosses with wider and more totalitarian powers).

Most workers expect to have bosses, and that would not change overnight in a revolution. There would be a tremendous unleashing of workers initiative, but there would also be a strong tendency to retain or return to the old ways of doing things, with new bosses, or even the same old bosses, in charge. Electing new bosses does not abolish the boss system.

The big issues are not decided “on the shop floor”, to use a phrase much loved by advocates of “self management”. Capitalism is already transferring more and more authority on the shop floor to workers themselves rather than supervisors or lower level line management. This only highlights the fact that questions like unemployment are imposed by market forces outside the control of “shop floor” management, or higher management for that matter.

Elected workers’ councils would be in exactly the same position of having to lay off staff, if there is no market for the goods they produce. Revolutionaries have to raise their sights above the shop floor, to places where more important decisions are taken, and to issues on which decisions simply are not taken in a market economy, because there are no decision makers with authority over the economy as a whole, and our fate is still subject to the blind workings of economic laws beyond our control.

If we want a revolution, then left-wingers, revolutionaries, will have to take on the functions of directors and managers of big businesses, as well as government ministries. Not many genuine left-wingers and revolutionaries have any great hankering to be on the board of directors of the Reserve Bank or BHP. But if revolutionaries are not leading the workers’ councils to implement a socialist economic policy, then it can only be right-wingers, or unreliable middle-of-the-road “experts” who are doing (or sabotaging) the job of management. Indeed in socialist countries, economic management functions seem to have been breeding grounds for revisionist bureaucrats.

Just saying “the workers will do it” does not solve a thing. Who are these workers who will do it after the revolution, without discussing what they will do, before the revolution? Power will pass from the hands of the bourgeoisie to the hands of the working class, because the working class will put forward a clear cut program to rescue society from the impasse it finds itself in under bourgeois rule. Slogans simply demanding a change in power because it is “more democratic” will get nowhere. The issue of “who decides, who rules” only arises in the context of “what is to be done”.

Revolution occurs when those who presently hold power are unable to do what has to be done, and when the only way it can be done is for their opponents to take the power to do it. The most class conscious and politically conscious workers will be the ones discussing these problems beforehand, and if we do not
have any ideas, how can we expect others to?

Socialist Management

The main areas of “management” in a typical capitalist firm are production, personnel, sales and finance. Research and development is another significant area in a small proportion of enterprises.
A lot of production management has become a fairly routine function which could be readily taken over and transformed by workers’ councils. Workers should have no difficulty rapidly improving productivity over what can be achieved under a basically antagonistic system of bossing. While workers’ productivity undoubtedly improves as a result of capitalist “bossing”, the very need for that bossing is itself a demonstration of how capitalism restricts productivity. Slave productivity was increased by harsh overseers, and also by having heavy tools that were hard to break (as well as hard to use). But productivity jumped much more with the elimination of slavery.

Capitalist bossing actually tries to keep workers stupid. “You’re not paid to think” is the supervisor’s catch cry, as soon as a worker starts saying “I think…”. But in fact workers are paid to think much more than slaves, serfs or peasants would think in their work, and they get sacked if they do not think. It is just that they are not supposed to think too much. Moreover modern technology places increasing demands on workers’ intelligence and requires a more and more educated labour force in greater and greater conflict with the old techniques of capitalist bossing. Communism would resolve this contradiction and unleash workers’ intelligence in production, so that “management”, “engineering”, “research”, “science” and so forth would cease to be restricted to an elite, excluding the contributions of the vast majority. Research and development would become much more widespread, be much closer to production, and require much less “management”.

Likewise personnel management is an essentially routine function that will be made much easier by the elimination of “industrial relations” between hostile employers and employees. There should be no problem organising the recruitment, training and allocation of labour in a plan based on full employment.

Purchasing and sales management does still involve an element of capitalist “entrepreneurialism”, although the work is done by salaried employees. But it can nevertheless readily be grasped and transformed, by the employees already engaged in it, and by other workers. The flexibility and dynamism of modern capitalism can be greatly exceeded by unleashing the workers’ initiative in this area too, as well as in production, to seek out new needs and new products. Even in a state capitalist market economy, the elimination of useless competition would save a lot of trouble, with unified marketing and supply arrangements under central planning. As the “market” is abolished, the supply function would become another aspect of production planning, rather than a separate problem of “marketing”.

The weakness of supply and marketing in socialist economies has been due to the general backwardness of those economies. They are (or rather were) “socialist” only in the sense of having *had revolutionary governments determined to accelerate the transition from capitalist to communist social relations. As far as the actual level of social development is concerned, the advanced capitalist countries have already reached a higher level, and this includes a higher level of centralised management and a higher level of organisation of marketing and supply, as well as the well known higher level of productivity in most industries.

Monopoly capitalism has abolished purely commodity relations in many areas, since the “exchange” is taking place between units under the same control, while labour power, and capital itself, remains a commodity. Although commodity production has been more restricted in socialist countries, as regards labour power and capital, central control of many products was actually less developed than in advanced capitalist countries. The improvements in supply and marketing when socialist countries have restored capitalist market relations does not reflect any inherent superiority of capitalism. It reflects the superiority of free market capitalism over bureaucratically controlled capitalism. A classic cartoon shows a “socialist” factory overfulfilling its production quota for nails (measured by weight), by producing a single giant (completely useless) “nail”.

The revisionist solution is to find more rational ways for central planners to co-ordinate the factories output to social requirements – mainly by setting goals in terms of market profits rather than arbitrary physical measurements. But exactly the same problem is faced by the top managements of large corporations in advanced capitalist countries. Solutions include the establishment of separate “profit centres” within the one enterprise, so that local managers will be more sensitive to market profits rather than blindly responding to higher directives.

In both cases the problem is that there can be no substitute for the market in an economy based on commodity production. If social production is divided between separate enterprises with antagonistic interests, then they can really only be brought together through market exchange, the best measure of which is money prices. If instead they are brought together by some other form of external coercion, there will inevitably be some misallocation of resources because the quotas set do not exactly correspond to money – the only measure of social needs in a market economy.

The communist solution is to dissolve the antagonism between separate enterprises so that each is directly aiming to meet social needs as best it can, rather than responding in its own separate interests, to an external compulsion to do so. Setting quotas in terms of numbers of nails, or the price of nails, would not solve the problem (although the latter would improve it). Having a factory management (the workers themselves), who are dedicated to meeting social needs, would solve it completely, since they would interpret planning directives from a social viewpoint rather than a narrow one.

The question of centralisation and decentralisation of enterprise management, is quite separate from the question of abolishing commodity production. One may advocate more local initiative at the same time as completely abolishing market incentives. Indeed it is noticeable that in both China and the Soviet Union, revisionists have strengthened central controls over individual enterprises, at the same time as widening markets relations. Increasing bureaucratic regulation there is necessary for the same reasons that it is necessary here.

Enterprises already under bourgeois management in socialist countries show more initiative when given material incentives and market “freedom”, just as socialist enterprises lose their drive when asked to produce just for profit. Overall, supply and marketing workers in an advanced economy working for the public interest should be able to introduce new goods to meet new needs far more dynamically than where this is done only to squeeze extra profit for their employers.

“Socialism” does not imply the restricted range of products available in economically backward socialist countries any more than it implies the lower standard of living, longer working hours or lower cultural levels common in those countries as compared with advanced capitalist countries.

Backward capitalist economies in third world countries have far worse problems with shortages and misallocation of production etc than backward socialist countries have had. There is no reason to anticipate major problems with the replacement of “commerce” by unified supply and marketing arrangements in advanced industrial countries.

Although the above functions of “management” present no special problems, financial management and investment planning is still an exclusive “entrepreneurial” function of capitalists, and it is precisely this that is decisive in abolishing the market economy and eliminating unemployment. The job is done by salaried employees as well as actual capitalists, but many of the employees are accountants, lawyers, bankers, investment analysts and so on, not ordinary workers. We shall consider this problem in more detail than other “management” problems.

Investment Planning

How do you decide whether to build a steel mill, or a hospital, or a thermal or hydro-electrical power station? Not just by democratically consulting steel workers, or hospital patients, or construction workers, or delegates from all three and others concerned. There must be some definite economic criteria for decision making. It is no good just saying we will build socially useful things like schools and hospitals instead of profitable things like steel mills or power stations. You need steel to build schools and hospitals, and you need electric power to run them.

The contempt a lot of “left” intellectuals have for industrial development, let alone “finance”, reflects a lack of seriousness about really doing anything. It implies either that we expect capitalist industry to somehow produce these things for the public benefit, or we postpone social change until everything can be produced free by magic (or we reduce our living standards below the appallingly low level that capitalism has managed to achieve).

At present the only criterion according to which goods and services are produced and investments are made to produce them, is market profitability. Some public services superficially have different criteria, but the “cost-benefit analysis” they use includes interest on capital as part of the costs, and measures benefit by what would be paid for the service if it was marketable. Government funds can only be invested if the overall social rate of return is sufficient to allow payment of interest on borrowings directly, or by taxes raised from sections of the economy that have benefited indirectly. Despite loud squeals from the “private sector”, no government projects are based on expropriation. It all has to pay for itself on the market, and return interest on the funds borrowed from the private sector.

The actively functioning capitalists today are the financial managers and similar functionaries (or party officials in “socialist countries”) who are not the nominal owners of the capital they control, but carry out the social functions of the capitalist controlling it, and live it up accordingly. Both in east and west, ownership is usually mediated via various “trusts” and capitalist luxury consumption owes as much to “perks” as to direct property income.

“Private ownership of capital”, in the sense of an individual capitalist directly owning means of production, is fairly obsolete. The difficulty Trotskyists have in finding a bourgeoisie in the Soviet block and China, ought to be just as great in the west, where capital is not usually privately owned by individuals either, and is certainly not passed on legally by inheritance, when death duties can be avoided. There are important differences between being a beneficiary under a trust, or enjoying perks as an executive, in the USA, and having a senior party position in the Soviet Union. But they are not as important as the differences between the bourgeoisie and the proletariat – between those who employ or exploit labour and those who are employed or exploited.

It is a specific function of the capitalist ruling class to allocate investments. It does this rather blindly, and with colossal waste, but it does do it and whatever is wasted, is often a loss to the particular capitalists concerned, as well as to society as a whole.

If the new regime had no criteria for regulating investments there would be general chaos as each workers’ council decides what it thinks should be produced and only finds out later that it lacks the necessary inputs or their is no market for the outputs.

In fact to begin with, the old criteria of market profitability would have to be used. To some extent even some of the old personnel, familiar with finance, would have to be used also. They would be disposing of state capital rather than private capital, and getting their perks from that, as before.

Starting from the old system, it would be a long struggle before the new system was really being used for planning, and experience in the Soviet Union and China shows that there is plenty of room for reversals along the way. As long as commodity production and wage labour exists, even the complete suppression of the old bourgeoisie and its replacement by a genuinely socialist state can not prevent some cadres of that state themselves degenerating into a new bourgeoisie.

Of course the top managers and administrators who can not be bribed or coerced into co-operating can simply be replaced by the workers’ councils. But most workers do not even know what they do, let alone how to do it differently, so there will be a pretty strong tendency to continue doing things the same old way. Workers would work, bosses would boss and financiers would finance, if these categories are not systematically uprooted.

Technically, it is not hard to imagine criteria for investment planning that are not simply based on “profitability” in disguise. There is even a substantial branch of orthodox “welfare economics” devoted to the problem of production for use.[1]

But implementing new criteria means going from private production for profit to social production for social needs, and requires fundamentally changing the way things are done.[2]

About 4% of the Australian labour force work directly in the “financial industry”, apart from those doing similar work in the industries being financed. That is about half the labour force employed by the construction industry, and most of its effort is tied up with just trying to keep track of who owns what and transferring profits from one pocket to another (and to or from the taxation system), rather than actual investment planning.

The capitalist parasites are not even very good at keeping track of their own wealth, as is shown by the various multi-million dollar frauds that have been coming to light. They certainly do not do a brilliant job of investing it more wisely and frugally than public servants would, as is constantly suggested by apologists for capitalism. In fact even their investment function is carried out for them by accountants, advisers, brokers etc who receive a share of the spoils, but are not the actual owners of the capital they invest.

After a revolution these workers could be employed far more productively to ensure that resources are used as efficiently as possible and to keep track of public property so that it is not misappropriated.
There is no great technical mystery about financial work that means it could only be done by and for an old or new bourgeoisie. It just requires a major struggle.

Under slavery, public officials were necessarily slave owners. Under feudalism magistrates were necessarily landowners and under capitalism captains of industry were necessarily capitalists. But social relations change. All it needs is revolution to change them.

“Experts”

Bourgeois “experts” can work for the new owners of industry just as they used to work for the old ones, being bribed with high salaries if necessary. Or they can work for their own account, as “Nepmen” did during the “New Economic Policy” following “War Communism” in the 1920s Soviet Union. But unless the new proletarian owners at least know what they want, the “experts” cannot be forced to work in a fundamentally new way. In the long run they have to be replaced by the workers themselves, and in the short run they have to be tightly controlled by the workers councils, while the workers develop their own expertise.

In the immediate period after winning power, real control of day to day management in most enterprises would continue to be in the hands of bourgeois “experts” who know how to do it, but only know how to do it in a capitalist way. Where managerial power was not in their hands, effective management would still be paralysed to some extent by the initial incompetence of workers who are taking on unfamiliar functions. No amount of decrees giving power to the workers councils would change those facts, unless we are supposed to wait until the working class has already completely changed, before having the revolution that will change it.

There would be considerable scope for resistance to and sabotage of government economic policy. There would also be difficulty reconciling the different priorities and demands of different sections of the working class itself. Only the practical takeover by the workers could gradually change this situation, and then only with reversals and a long historical struggle, combining mass pressure from the workers councils below, and coercion and inducements from the revolutionary government above, before the dictatorship of the proletariat has really effective control of even the state sector of the economy, let alone education, culture etc.

Nevertheless, the working class in advanced capitalist countries like Australia is already literate and quite highly educated compared with the workers that took power in the Soviet Union and China. Most “experts” are not bourgeois, but just highly trained workers, perhaps with a few airs. Even the managers and engineers in overall charge of industry at present are themselves salaried employees, mostly at no great social distance from the mass of workers. Engineering is already a basically proletarian occupation. Management not yet, but headed that way.

Where the workers councils are strong, it should not be all that difficult for them to encourage or compel most managers and engineers to cooperate, and take on the functions of those that won’t. It will be more difficult where the workers councils themselves are weak, which is bound to be the case in many places, since the revolution develops unevenly. But it would hardly be impossible.

Conclusion:

The problem of abolishing unemployment by having a revolution is nowhere near as difficult as the impossible task of trying to abolish it without one! There is no need to politely cover up the absurdity of “left” schemes for dealing with unemployment within capitalism. We should say directly that these schemes are nonsense and go on to work out the realistic problems of preparing for revolution.

As the Communist Manifesto argued, we should raise the “property question” to the forefront of all immediate, practical struggles. Just how we can have a communist revolution in an advanced industrial society remains to be seen – it’s never been done before. But we should be quite clear that this is “what we are on about”.

[1] It can be proved mathematically that the capitalist pattern of investment according to the rate of profit can never lead to an efficient allocation of economic resources, and that “marginal cost pricing” amounts to a labour theory of value.
[2] The debate among allegedly “Marxist” economists about the so-called “transformation problem” relates closely to the problems Soviet bloc economies faced in allocating investments without using the traditional capitalist calculations based on an “average rate of profit”. A “rate of profit” is essential when enterprises have separate interests, and “marginal cost pricing” is only feasible when they do not. The “optimal” allocation of resources according to a central plan is not the same as the “equilibrium” possible when resources are privately owned – whether competition is “free”, “perfect” or monopolistic. “Equilibrium” situations can include unemployed labour and other resources, as long as the rate of profit is equalised and maximised.

Considers various “solutions” from the labour movements, in the light of the earlier analysis, and rejects them all, but cheerfully, in view of the next instalment, part 7.

– “Giving Fraser the Razor”

– Blowing Up the Balloon

– Fine Tuning

– Political Facts

– Shorter Hours and Higher Pay

– Expanding the Public Sector

– Workers’ Co-operatives

– Labor to Power with Socialist Policies?

– Economic Consequences of Statism

– Protectionism

– “Militant Struggle”

– Revolutionary Optimism

6. SOLUTIONS

The collection of previous instalments on the nature of unemployment is important because it suggests what could and what could not be solutions to the problem.

It follows from the above analysis that the unemployed form an essential “reserve army of labour” as necessary to ensure a continuous supply as the existence of stockpiles of commodities in the warehouses or unused production capacity in the plants. The size of this reserve army does not depend primarily on government policy, but on the objective state of the economy and the phase of the business cycle that it is in.

Australia is part of an interlocked world capitalist market where capital flows freely according to the rate of profit, and where movements in interest rates, prices, wages, and unemployment therefore take place in parallel among all the advanced western capitalist countries together. It would obviously be nonsense to blame the overall state of the Australian economy on the particular policies of any government here, since the same situation exists throughout the western world.

The conservatives are right to say Australia has to adapt to changes in the world economy or the situation will get worse. They are also partly right to say that to stimulate investment and reduce unemployment profits must be improved at the expense of real wages and living standards. But they are wrong to pretend that there will be much improvement without a major economic crisis.

Unemployment has grown because overproduction and insufficient expansion of markets has reduced profit margins and therefore reduced investment. Any “solution”must therefore involve expanding markets to increase profitability. That is the crucial fact which emerges from studying the causes of unemployment.

A lot of people in the labour movement do not like admitting this and instead come up with all kinds of fancy arguments suggesting that capitalism is really a wonderful system capable of continuously improving living standards and providing jobs for all – if only the government would follow correct economic policies.

Those arguments are very mysterious and technical, involving “multipliers”, “accelerators” and various tricks with mirrors. But you only have to look around at the real world to see they are bullshit. For what possible reason would the capitalists be ignoring this wonderful advice on how to keep their system going, if it could really work?

The conservatives are openly admitting that capitalism is a rotten system which needs to grind people down in order to keep going. They are admitting that full employment and rising living standards are not permanently compatible with the capitalist system, which has its own requirements contradictory to social needs. They are actually admitting that production for profit is the cause of our problems.

On that point every socialist, revolutionary or not, must surely agree with the conservatives. Only the wettest “liberals” could join the Labor Party in insisting that there is really nothing wrong with the capitalist system itself – the problem is that wrong economic policies are being followed.

Socialists will not disagree with conservatives about the existence of statistical facts, like the decreased share of profits in the GNP, “real wage overhang” and so on. We will not join the Labor Party in arguing that it can all be fixed by magic tricks with mirrors.

Where we do disagree with conservatives is about whether capitalism is such a wonderful system that we should put up with unemployment and reduced living standards just in order to keep it going a bit longer.

Where revolutionary communists will disagree with other “socialists” is whether capitalism is just getting worse in a gradual way that would make it possible to introduce socialism peacefully, or whether it is heading for major upheavals which make a violent break between the old system and the new, both necessary and possible.

Now let us consider some of the various “solutions” that have been proposed for unemployment according to the simple criteria – “will this proposal increase profitability”. If it will not, then we know from the analysis above, that it will not work.

Giving Fraser the Razor

Attempting to blame each other for the state of the economy happens to be one of the daily preoccupations of Government and Opposition politicians, and unfortunately the left generally goes along with this charade.

Conventional wisdom has it that government job creation schemes, more stimulation of the economy through deficit spending, and various specific adjustments in economic policy could improve the situation. Only Fraser’s “razor gang” mentality prevents these solutions being adopted.

In Britain the state of the economy is being blamed on the Thatcher Government, by business as well as labour. But tightfisted “monetarist” governments have come to power in Australia, Britain and the USA as a result of the previous failure of their opponents to improve the state of the economy. They may conceivably make things worse. But their predecessors have not done too brilliantly either. It will be interesting to see what happens in France. Does anybody on the left seriously imagine that France will now escape the economic difficulties embracing the rest of the capitalist world, because it has a more ‘progressive’ government?

At the first Australian Political Economy Movement conference in Sydney, there were a number of papers purporting to explain unemployment and economic crisis as an inherent feature of capitalism. None of them even suggested that the personal malevolence of Malcolm Fraser was a cause of the problem – let alone the cause.

Nevertheless, the conference plenary session adopted a resolution loudly denouncing the Fraser Government for causing our economic difficulties with its wrong policies!

If that is the response of people at a political economy conference, it is not surprising that the left generally completely capitulates to Labor Party views about the economy. The general feeling is that somehow or other, it must be Malcolm Fraser’s fault, even though unemployment actually grew much more rapidly under Whitlam than it has under Fraser.

Even people who know better tend to go along with this because there does not seem to be much else to do. Demonstrations and agitation have to have a target, and Malcolm Fraser, with his callous attitudes, makes a good one.

If we cannot blame government policy, what can we do? It is in the Labor Party’s interest to pretend that Fraser’s policies are the cause of unemployment. But the only way Labor could do better than Fraser at reducing unemployment would be if they know how to make industry more profitable. There is no evidence that they do, and no reason to doubt that Fraser is doing as much to increase profitability as he possibly can.

Certainly we should give Fraser the razor, along with Bill Hayden, Bob Hawke and the rest. It will improve public morale no end. But it will not bring down unemployment. Only improved profitability and expanded markets can do that.

Blowing Up the Balloon

The main thrust of objections to the Fraser Government’s economic policies seems to be that they could do more to stimulate the economy by increases in government spending. They are accused of wilfully refusing to do so because of dogmatic adherence to “monetarist” theories, and general hostility towards the working class.

Actually this argument amounts to dogmatic adherence to Keynesian theories that have long been discredited by the course of events. All the governments of the western world have been stimulating their economies by increases in government spending, and it simply is not working any more. Keynesian economic policies now amount to little more than attempting to prolong the “boom” phase of the capitalist business cycle by deliberately encouraging the overextension of credit to finance overproduction and overinvestment.

Credit expansion has deferred the crisis, and intensified the most prolonged boom in history. But only at the expense of deepening the structural imbalances that the crisis is needed to resolve, and therefore making the crisis far more intractable when it does come. There comes a point when it just does not work any more. If it still worked, they would still be doing it.

When asked what would happen in the long run, Keynes replied that in the long run, we are all dead. Glib claims that more deficit financing to stimulate the economy are the answer, are simply an assertion of faith, flying in the face of all recent experience. The conservative Ford Administration in the USA ran a breathtaking $60 billion deficit, and it has not done any more than postpone the problems.

Attempting to stimulate the economy by more government spending has been compared to trying to stop a balloon collapsing by blowing into it harder. At a certain point when a balloon is being inflated, the fabric tears and air starts rushing out the hole. You can keep the balloon’s shape for a little while by blowing harder, but the air keeps rushing out and the hole gets larger. Eventually the balloon has to collapse and the only thing to do is to let it go and patch the hole before re-inflating it again – if the hole has not got too big to patch while you were uselessly blowing air through it.

If government spending is paid for by taxation, then it is just a transfer of resources from one sector of the economy to another, with no necessary increase in employment, although the projects may be well worthwhile for other reasons. If the money is borrowed on the open market, then it drives up interest rates and diverts funds from other investments. If it is effectively “borrowed” from the Reserve Bank, then credit inflation can be the only result. The trick can not be done by mirrors.

“New Deal” policies did help speed up recovery from the last depression. But mainly by helping to keep prices up in those industries where they had collapsed more than necessary due to insufficient monopoly concentration. The “New Deal” stopped dumping, put a final end to “laissez-faire” and thoroughly established the system of state monopoly capitalism. But today nearly all industry is pretty well monopolised. Even the farmers have strong cartels, and with rampant inflation, dumping can hardly be an immediate problem.

Really it has been a remarkable performance since the last depression. Despite predictions of capitalist stagnation since the end of the fifteenth century, and with a social system straight out of the sixteenth century, the bourgeoisie has managed to sustain economic growth for another fifty years at a pretty fair pace.

While pathetic by future standards, the rate of economic growth has been sufficient for conservatives and reactionaries (including most of the “left”) to actually complain and want to slow it down. What more can state capitalist policies be expected to achieve? Permanent survival of capitalism?

Fine Tuning

When people say that government policy is responsible for unemployment being more than it should be, they usually argue that there should be a certain increase or decrease in interest rates, the exchange rate, taxes, deficits or what have you.

Perhaps there should be. Who knows and who cares? The argument always revolve around the fact that any effect in one direction is counteracted by other effects in the opposite direction.

Quite clearly there is some underlying movement in the economy itself that makes the adjustments in government policy necessary. People argue about whether interest rates should be marginally increased or decreased, but they have gone up from 2.1% on two year government securities in 1950 to 10.8% in 1974 on their own volition and for objective reasons. Nobody seriously suggests that any government policy could successfully halve today’s interest rates, let alone restore them to their 1950 levels.

Adroit handling or misguided policies could make a good situation better, or a bad situation worse, or vice versa. But in a market economy it is the market, not government policy, that determines the overall situation. And we are talking about a world market, completely outside the control of any group of governments, let alone the Australian Government.

A government that raises interest rates when it should be lowering them, or vice versa, can certainly make things worse. The same goes for other economic variables that government policy can influence.

But the best a government can do is get its economic policy absolutely right, all the time. In that case they will avoid precipitating any crisis before it is unavoidable, which is not quite the same thing as having “control”. No amount of “fine tuning” can determine the overall direction that the world economy is moving. Nor can it change the fact that interest rates and other variables must be adjusted in accordance with that movement and not against it.

“Fine tuning” has been likened to trying to straighten a piece of string by pushing it. The sort of “controls” available to governments are just not capable of determining economic developments. If you want to straighten a string you need to be able to pull both ends, not just push. If you want to control unemployment, you have to have complete central planning of investment and employment and indeed, production and consumption generally. The economy needs a new engine and new steering, not just “fine tuning”.

There is a branch of mathematics called “control theory” which investigates what observations one needs to be able to make, and what variables one needs to have control of, to determine the future path of a complex dynamic system.

Economists have a “simpler” procedure which consists of counting the number of “variables” and “policy instruments” and hoping they are equal. To predict the future course of the economy they do a lot of plotting straight lines through two points.

The fact is that even very simple dynamic systems are extremely difficult to observe and predict, let alone “control”. It is sheer stupidity to imagine that anything so complex as a modern market economy can be effectively controlled by anything so simple as government monetary and financial policies superimposed on market price movements.

A system like this is bound to have oscillatory movements and catastrophes. It is like trying to damp out ripples in a pond by making counter ripples. You will get pretty interference patterns, but nothing very stable.

Before you can control any dynamic system you have to at least be able to predict what the effect of any changes you make will be. If anyone knew how to predict that, for the world market, they would not be wasting their time giving economic advice to governments. Literally billions of dollars could be made by speculation on the commodity and financial futures markets if anyone knew how to predict what the world market would do next, let alone control it. The funds you could accumulate from speculation would give you far more control over subsequent market movements than any amount of government policy.

There seems to be no obvious reason why anybody on the left should want to enter into the argument about whose policies for fine tuning the economy would work better. But if we are to do so, there seems no compelling reason to enter on the Labor Party side of that debate.

There is good evidence that the conservative parties are better at that kind of thing than the Labor Party is, because they have more idea of what it is all about. At least they understand that the name of the game is “profits” and are therefore trying to make the capitalist economy work the only way it can. Labor Governments do end up adapting themselves to economic reality, and working as hard as they can to boost business profits. But it does not seem to come naturally, and we have to put up with an awful lot of hypocritical mumbo-jumbo about the workers’ interests, before they get on with it.

Labor Party supporters make persistent efforts to prove that the other party’s economic policies are stupidly wrong. This proves only one thing. It proves that these people, even if allegedly “Marxist”, have a very deep faith that capitalism can be made to work much better, and that their party is the one to do it.

Political Facts

Most voters understand how capitalism works, better than the Labor Party does, and they are aware that conservative parties know more about economic management than reformist parties do. That is one major reason so many workers vote for the party that frankly upholds the interests of their bosses. If people did not accept the basic idea of having bosses, they would be working for a revolution, not voting Labor.

Labor supporters seem to have a mental block about it, but Fraser is Prime Minister because he won by a landslide, not because John Kerr put him there.

People voted for Fraser because the economy deteriorated much more sharply under Whitlam than it did under McMahon. One statistic tells the story.

Unemployment rose by more than 100 for every day Fraser was in office, according to Bill Hayden speaking at the last Federal elections. It did, but unemployment rose by 150 for every day Labor was in office.

Another fact confirms that part of the reason for this sharp deterioration was Labor’s policies and not just objective conditions. The fact that Labor has abandoned nearly all the economic policies advocated by Whitlam and adopted those advocated by Fraser.

Bill Hayden fought the last election on policies to cut taxes and put money back in people’s pockets, reduce government spending, impose wage restraint and so on – exactly the policies that Fraser won with. It is hardly surprising that most voters preferred to let Fraser implement those policies himself, even though he obviously has not been doing much good with them either.

In government, Labor even had a policy of discouraging foreign investment – in a completely open economy largely dominated by foreign capital. When that policy actually started to work, and foreign capital dried up, Labor supporters complained about a conspiratorial “strike by capital” that was aimed at bringing down their Government. How contradictory and inane can one get?

That is a good illustration of how bad government handling can make a bad situation worse. But Labor supporters are well aware than even if the Whitlam Government had handled economic policy perfectly, instead of stuffing it up, unemployment would still have grown dramatically because of the general state of the world economy. Why should we not admit the same about Fraser?

Public opinion turned against the Labor Party because of the mess it was making, and also the mess it was not making but was blamed for anyway. The media mobilisation of that public opinion was carried out by the same newspapers that brought Labor to power in 1972 with viciously personal attacks on McMahon, and “It’s Time” as the front page headline. In 1972 McMahon was blamed for unemployment too. It was not his fault, was it?

To gain control of the Senate, which he had never tried to abolish, Whitlam resorted to open bribery of an opposition member, Senator Vince Gair, in the tradition of banana republics and dictatorships everywhere. When the Parliamentary opposition tried for force the Labor Government to elections by cutting off supply, that Government tried to rule without the consent of Parliament or the people.

Rather than face a democratic election, Whitlam was even prepared to ask the Queen of England to intervene in Australian politics; to sack an Australian constitutional official appointed by Whitlam himself, and allow Whitlam to rule by decree.

If a conservative government had done any of those things, Labor supporters would rightly have been outraged. But Labor supporters prefer to forget about the economic incompetence that cost them their chance in government. They prefer to distract attention from their undemocratic manoeuvres by a loud-mouthed phony republicanism – as though Kerr had caused the constitutional crisis by insisting on elections, rather than Whitlam by refusing to hold them.

Labor supporters adopt the classic conservative and reactionary argument, that an unpopular government should be given a guaranteed period in office so that voters can not throw it out before they find out what was really good for them after all.

After the Kerr business a lot of people suddenly realised what they ought to have known before. That Parliamentary forms do not mean very much and the conservative parties will use every dirty trick to stay in power. It ought to have also taught another lesson – that the Labor Party shares the same basic philosophy.

Neither party is so committed to Parliamentary government that it would fight against Parliament being replaced by military rule in the face of a genuinely revolutionary opposition.

It is sickening how people on the left pretend the economy is crook because of Fraser, when they know perfectly well it is an international problem. We should stop supporting Labor Party lies and start telling the truth about how the capitalist system really works.

Of course we need a target to fight. But if we do not know what that target is, then we had better take time off to find out, instead of just whingeing impotently about Fraser.

Shorter Hours and Higher Pay

Campaigns for a shorter working week and higher real wages have been put forward as a solution to unemployment. The argument is that higher wages will allow workers to buy more goods and so force employers to hire more workers. Likewise shorter hours will require more workers even to produce the same amount as now.

Of course we should fight for shorter hours and higher pay. That will become more difficult as unemployment increases. But it is still possible to win victories, even when there is mass unemployment, for reasons explained earlier. But the effect will be to reduce profits further, not increase them. So it cannot be a solution for unemployment.

In a communist society, any accidental “unemployment” could certainly be eliminated by reducing the amount of work done more rapidly than had been planned. Alternatively, people could work the same hours, but the extra workers could produce more goods so that everyone’s standard of living would rise. But that is because workers would not be “employed”. They would not be used by the owners of means of production to make a profit. They would be the “employers”, using the means of production to satisfy their own social needs.

In a capitalist society production is carried out for profit, not needs. General Motors can certainly be compelled, under some circumstances, to pay its workers more, or let them work shorter hours. But they are in the business of making money, not just making cars. If they can not make more money they are not going to hire more workers just so the workers can buy more cars.

There is no such thing as “overproduction” in the abstract. Whatever Friends of the Earth might say, it is not as though we have too many consumer goods or houses or schools or anything else. Nor have we too many means for producing them. Living standards are abysmally low is most of the world, and nothing to write to another planet about here in Australia. It is just that too much has been produced to be sold at a profit, and that is not a problem you can solve by reducing profits further.

Expanding the Public Sector

Calls to expand the public sector, are becoming more common, (especially from public sector unions!). This is partly just a reaction to government policies aimed at expanding the private sector at the expense of the public sector. But there is also some suggestion that in itself, expanding the public sector would create more jobs and reduce unemployment.

Government job creation schemes either have to be paid for by the rest of the economy, in which case they provide no net investment, or else they have to pay for themselves. In that case they have to sell their products on the market that is already suffering from overproduction and overinvestment. As far as employment is concerned, there is no difference in principle between expanding either the public or the private sector. The problem is that both are contracting, because they both face a lack of markets. Why should one be able to find markets when the other cannot?

In fact, of course, the public sector has expanded quite dramatically and will no doubt continue to do so. There are lots of things capitalist state enterprises can do better than capitalist private enterprises. But this has not prevented unemployment from growing and there is no reason to expect that it will. In Britain for example, some of the biggest layoffs have been in nationalised industries like British Leyland and the British Steel Corporation.

Whether a firm is publicly or privately owned, in a market economy its ability to provide jobs will still depend on its profitability and that will depend on selling its goods on the market. When there is overproduction it affects government owned enterprises exactly the same way as private ones.

It sounds plausible for Australian car workers to demand that the car industry be nationalised to safeguard their jobs. But how has that helped British car workers? What are railway workers supposed to do when their jobs are threatened? Demand that the railways be nationalised? In Britain some coal miners have actually been demanding that their industry be sold to private enterprise because the government is unable to invest funds in keeping their jobs.

Nationalisation is probably a good thing for all sorts of reasons, but reducing unemployment is not one of them. One need only look at Poland or Yugoslavia to realise that even economies completely dominated by the public sector, can have pretty much the same kinds of economic problems as the “mixed economies” of the west. The economic laws applicable to market economies apply whether the capitalise enterprises are owned by shareholders, bondholders, or the state.

Workers’ Co-operatives

There have been some instances of bankrupt firms being taken over by their workers to preserve their own jobs. The Clydeside shipyards, Lipp watch factory and Lucas Aerospace are well known examples. There is also a traditional “co-operative movement” associated with the labour movement, and a movement for workers control and/or “self-management’. Capitalists themselves are also trying to incorporate workers’ representatives in management functions, with extensive legislation for this purpose in West Germany and some other West European countries, and in Yugoslavia and China.

To some extent, workers’ co-ops can positively represent the new form of social production emerging within the old. Just as the emergence of huge transnational corporations and nationalised industries points towards the socialisation of industry, but more antagonistically.

If workers’ demonstrate that they can manage industry better than capitalists, that is certainly worth demonstrating, to pave the way for getting rid of capitalism in future. It may even save specific jobs in specific cases. But so, for that matter, could any other improvement in the management of an ailing firm.

Obviously improvements in the competitive position of a specific firm cannot reduce, but only displace, the unemployment resulting from overproduction in the economy as a whole. Other workers’ in the same industry will lose their jobs as a result of competition from the firm whose management has improved. This may encourage further takeovers, and be well worthwhile, but there is no need to pretend it will reduce unemployment.

Bankrupt industries may not be the best placed to attempt demonstrations of the superiority of workers’ management. If the prospects for a firm are so poor that its owners are prepared to let the workers’ have it, then they must be very poor indeed. The workers will quickly find themselves facing the same problems of finding a market for their products, that the previous management was unable to face.

The workers’ may do better, since they will show more initiative and will know how to increase productivity and so on. But they may also find themselves accepting worse conditions than they would put up with from their former bosses. (Many self-employed people do put up with longer hours etc – the compensation of not having bosses being well worth it). In the end they may find that they too are forced to carry out layoffs.

If we want practice at running industry ourselves, why not start by taking over some really profitable ones, instead of lame ducks? Presumably we cannot because the state power would be used to prevent us. So it comes back to a question of overthrowing the state. I

In itself a co-op need not be anything especially progressive. For example, the ultra-reactionary health funds in Australia are supposed to be owned by their contributors. So are some insurance companies and agricultural marketing organisations. Within a market economy a genuine workers’ co-op is certainly a more progressive form of organisation than the traditional structures, but it still only amounts to the workers collectively being “their own boss”. It does not abolish the status of workers as “employees” of “their” firm, who are “employed” (used, exploited) by it.

In Yugoslavia the entire economy consists of enterprises nominally under workers’ control, but exchanging products with each other, and allocating investments, through the market as in any other market economy. Yugoslavia has one of the highest unemployment rates in Europe, as well as a very high rate of economic emigration.

If all the firms in an entire capitalist economy went bankrupt and were taken over by their workers, to sell each other goods on the market, they would all remain bankrupt. When the working class does take over industry, it will do so collectively as a class, and abolish the market economy, not ” be their own bosses” within it.

To abolish unemployment, we need to abolish the market economy. Any measures that train workers in economic management are beneficial to that, but none can solve the problems of a market economy without actually abolishing it.

We should support workers who take over their bankrupt firms, just as we should support workers fighting for shorter hours or higher pay, or unemployed youths looting shops, but we need not pretend that any of these activities will reduce unemployment.

Labor to Power with Socialist Policies?

Perhaps a Labor Government with more radical policies could solve the problem? Instead of capitulating to business pressure, they could really hit hard with resources taxes, nationalisation, and a siege economy protected from overseas influence. By taking control of the commanding heights of the economy, they could force industry to provide employment whether it is profitable or not.

This sort of program has gained some support in the British Labor Party. Presumably it could become popular here too, although events in Britain may pre-empt that. The “left” program has won some support from traditional Labor Party activists, because of the obvious bankruptcy of previous policies. But it has also been imposed on the British Labor Party by fairly manipulative means, by people who know they cannot get as much support for their program by going to the working class directly, as they hope to get by working through the Labor Party. It is not a socialist approach, let alone a revolutionary one, because it is based on making social changes from above, without the support and against the wishes of the only people who can really change society – the masses themselves. If it could succeed, the result would be a more bureaucratic and less democratic society – a corporate state, not socialism.

There is an ideological convergence between the interest of the bureaucratic bourgeoisie in state owned industries, trade union bureaucrats, state employed intellectuals and so on, in promoting this “statism” as “socialism”. A more fascist face of a similar basic ideology can be seen in Eastern Europe and in the French Communist Party. The techniques of demagogy and manipulation also have a lot in common.

A feature of this approach, is an identification between “socialism” and “government controls”. The solution to practically any problem is supposed to be a government regulation compelling private industry to act more in accord with the public interest. That identification is promoted heavily by ideologists of the right, like Milton Friedman, who exploit resentments against “big government” and bureaucratic regulations”.

In fact government regulations are required in a market economy because of the inherent antagonism between the interests of each separate producer, to maximise their own profit, and the public interest in things like a better environment, safe working conditions, better products and so on. The regulations are effective by making it more profitable for firms to modify their behaviour in the public interest, than to go on ignoring the public interest. The same effect is achieved by various selective taxes, allowances and so on. Where regulations cannot overcome the limitations of production for the market, the bourgeois state itself will step in and provide a “public service” – such as roads, broadcasting, education and so on.

There is always a need for more regulations, because the bourgeois state is unwilling to interfere with the private interests of various sections of the bourgeoisie as much as it should. So naturally, progressives often find themselves involved in campaigns for more government regulation to restrict some particular abuse or other. Likewise there is always a need for more “public services” because the bourgeois state is always reluctant to assume responsibility for an activity that might have been carried out by some particular section of the bourgeoisie. So we find ourselves involved in campaigns for more public services.

In these campaigns, the interests of sections of the bourgeoisie tied to state capitalism, often coincide with those of the working class. This is nothing new – a lot of social progress within capitalism has depended on one section or another of the ruling class breaking ranks from the others. But we should not delude ourselves that the bureaucrat bourgeoisie and their trade union hangers-on are in any way “socialist”.

The statist approach can never turn private production for profit into its opposite – social production for use. Regulations are symptoms of the basic antagonism persisting, while the elimination of unemployment and economic crisis requires a removal of that underlying antagonism. We need to abolish private production, not just provide more public services.

A socialist economy would actually require less regulations and controls than a market economy. Even the “public sector”, and as such enterprises became genuinely “public” they would cease to be separate enterprises having separate interests from the “public” at all. You do not make regulations governing your own conduct at home, so why should you do so at work?

The result of the “left” influence on the British Labor Party has of course already been a sizeable swing of Labor support to the new Social Democratic Party, even though the Labor Party has not yet fundamentally broken with its traditional “labourism”. This will presumably produce a Labor Party and trade union backlash against the “left” program that is alien to the traditional outlook of Labor Party supporters. Alternatively, the present two party structure in Britain may be replaced with a new one, leaving the “entrists” once again out in the cold, and the traditional Labor supporters once again bankrupt. You cannot change people’s political consciousness by stacking their party meetings, and most workers prefer their present bosses to the proposed new ones.

Economic Consequences of Statism

Let us leave aside the political aspect and look at the economic consequences of a statist program being implemented. Remember, we are not talking about a popular revolution in which the working class takes command of society and re-organises it. If that was the aim, the method would not be through the Labor Party. We are talking about policies to be implemented by a parliamentary government, with the existing state machine still in place, and with the working class still tied to its traditional organisations. Viewed in that light, we have an excellent recipe for a Chile style disaster.

Every measure proposed is designed to transfer economic power from private industry to a government hostile to private industry, without actually expropriating private property. The present owners and managers of industry are to be directed to carry out economic policies hostile to their own interests. But why on earth should they comply?

In themselves, the measure proposed as an “alternative economic strategy” could only reduce profitability and jam up the economy completely. Not capitulating to business pressure must mean reducing profits and therefore reducing private investment and job creation. “Controlling” foreign investment must mean less foreign investment and so less jobs.

Legal nationalisation would just mean saddling the government with a lot of businesses that were already in trouble, plus additional debts to pay off their owners. If capitalism survives the coming crisis it will certainly be with a great deal more nationalisation and state capitalism, but that would be part of the emergency re-structuring after the crisis, not a means of preventing it.

Perhaps the aim of crippling business profitability would not be legal nationalisation, but to force capitalists to hand over their enterprises to the government without compensation. A roundabout sort of expropriation. But if the aim is expropriation, this is a rather odd way to go about it. Expropriation means confiscating the property, worth thousands of millions of dollars, of the class that has up till now ruled society. That class has shown a definite tendency towards hysteria when its property rights are even mildly infringed upon, let alone denied entirely. What on earth is the point of leaving them in charge of industry while you are expropriating them? If they are not kept under lock and key, surely they should not actually be the people asked to implement government directives against their basic interests?

What else could they do except sabotage things in every possible way, and ensure the government is blamed for the economy being in a far worse state than it was before? In war, when one army defeats another, the first thing it does is confiscate the losing side’s weapons. It does not put them in charge of guarding the armories and performing sentry duty. The bourgeoisie’s weapons are its control over industry (not to mention its military weapons).

If our aim is to confiscate the property of the ruling class, then we need our own state and our own army to establish that state. Trying to do it through cabinet ministers in their state, surrounded by their officials and their armed forces, seems rather odd. It sounds like just a complicated way of getting those ministers killed, and anyone silly enough to be associated with them, killed also.

Fortunately, the chances of a Labor Party with “left” policies gaining office seem quite remote. So we need not worry too much.

Protectionism

Unlike other “solutions” proposed from the labour movement, increased tariff protection could have an immediate positive impact on employment in Australia. By restricting other countries from access to Australian markets, the opportunities for employment creating investment in Australia are necessarily widened, at the expense of course, of jobs in other countries.

It is amazing how “leftists” put forward the most blatantly chauvinistic proposals for displacing unemployment from Australian to Asian workers, with pious references to opposing their low wages, exploitation by fascist regimes etc.

Apart from elementary class solidarity, the catch with protectionism is of course, that it cuts both ways. It is to the selfish advantage of any country to restrict its markets. But when all countries do it the result is a loss of markets for all.

While world trade is expanding, there is an increasing “cake” and different countries have been able to agree on how to divide it up. As the crisis intensifies pressures for protectionism will become stronger even though everybody knows the result will damage everyone. So will the pressure for trade wars, and real wars.

Protectionism is inevitable as world trade spirals downwards, but we have no interest in promoting it.

“Militant Struggle”

In their newspapers some political groups urge “militant struggle” as the workers answer to the “employer’s offensive”. It is not entirely clear what this means, if it means anything. But presumably it must be intended to suggest that layoffs and the like are not the result of blind market forces, but are some kind of conscious conspiracy by the capitalist class in order to weaken the working class. By fighting back hard enough, workers can force employers to abandon their “offensive” and restore full employment.

This is obvious nonsense, nor worth discussing. But it does raise the question of how much can be achieved by resistance to layoffs and cutbacks. The answer is, of course, that “if you don’t fight, you lose”. People have to fight or they get ground down, and you can win specific improvements by fighting.

But you cannot change the overall working of the system by this sort of fight. Since we are going to be forced into all kinds of defensive struggles, often losing ones, it is pretty important to be developing an offensive strategy that can win as well. Otherwise it gets rather demoralising. We need to be able to say what could be done about the economic situation as well as just resisting its consequences.

Instead of that, trade unions tend to just resist and lose, in a fairly hopeless sort of way, or even turn the battle against other sections of workers. Often, trade union responses to unemployment ignore the fact the employed and unemployed workers are both part of the same labour force, with common class interests. Trade unions often emphasis protecting the jobs of people who already have them, and especially those who have had them longest – at the expense of school leaves, housewives, part-timers, casual workers and others who need jobs, and perhaps need them more desperately than those protected by “seniority”.

Like demarcation disputes, these trade union efforts can be very “militant” without any positive result. Trade unions are basically conservative organisations concerned with selling their members’ labour power at the best price they can get. We should aim to unite the employed and unemployed workers rather than just protecting the separate interests of employed workers from unemployed ones.

Militant struggles against redundancies, factory occupations and so on, can also suffer this problem to a certain extent. Even if they can actually save the particular job at stake, which is unusual, they can not reduce the size of the pool of unemployed and can only displace unemployment from one group of workers to others, often within the same industry, or even the same firm.

Employers may conceivably be forced to keep a particular factory open, although that is often just as hard as finding new jobs. But it is pretty difficult to change the fact that the total amount of labour required in an industry has declined. The question will be whether a particular factory gets closed down or other factories stop taking on school leavers to replace retirements. Either way, unemployment will grow, but it will affect different groups of workers directly.

The same applies to struggles against “the cuts”. The plain fact is that the government is forced to cut its expenditure because it just has not the resources to sustain it. There is no conspiracy. Nevertheless, what gets cut where, and how much of the brunt is suffered by who, will be influenced by class struggle. So it is worth fighting back. As long as the fight is not just suggesting that some other, more vulnerable section of the working class should cop the lot.

Just saying “cut defence” sounds like an easy way out. But the whole defence budget would not make all that much difference, and it avoids some hard questions about how to deal with Soviet aggression. In practice, if the budget cannot be increased, struggles against the cuts will, whatever people might say and want, just divert cuts from health to education, or education to welfare, or welfare to health.

If we want to not only oppose any cuts at all, but also demand improvements in welfare and public services, we need to have definite proposals about how this can be achieved. We should certainly support militant defensive struggles. But they cannot be put forward as a general answer to unemployment and economic decline.

Revolutionary Optimism

This whole paper so far may sounds rather pessimistic and deterministic. It seems unemployment is inevitable and there is nothing that can be done. But that is only true if your perspective for “something” is for some reform within the capitalist system. Things are grim for reformism, but not for revolution.

Recognising the inevitability of certain laws under capitalism is not deterministic. It implies that the way out is to abolish capitalism. Revolution is a voluntaristic act that must be carried out consciously. The next section, to be published later, (editor’s note: this refers to part 7) discusses revolution. It suggests how the economic situation could be resolved by revolution and suggests that revolution is a perfectly matter of fact “solution” that makes far more sense than the others that have been put forward.